The Internal Revenue Service is investigating 125,000 high-income Americans who earned more than $400,000 a year but failed to file tax returns between 2017 and 2021.
Starting this week, about 25,000 people who earn more than $1 million a year in tax evasion will receive notices of noncompliance from the Internal Revenue Service.
The IRS also announced that the notice will be sent to more than 100,000 people with incomes between $400,000 and $1 million between tax years 2017 and 2021. news release.
As of Thursday, “approximately 20,000 to 40,000 letters are being sent out each week, starting with filers in the highest income categories,” the IRS noted.
The agency said it learned about these high-value tax frauds from “third-party information, such as through Forms W-2 and 1099s,” and urged those who received violation notices to “act immediately to avoid further follow-up investigations.” “I recommended that this be done,” he said. Notices, increased penalties, and increasingly strong enforcement actions are being taken. ”
In the United States, tax evasion is considered a felony, punishable by up to five years in prison.
Consequences vary by state, but in states like California, violators can be fined as much as $20,000.
Until now, the IRS’s nonfiler program has not been able to run smoothly due to “severe budget and staffing constraints.”
The IRS believes that the passage of the Inflation Control Act of 2022 provided $80 billion in additional funding to statutory agencies, most of which will be used to strengthen tax compliance, especially by wealthy tax evaders. The IRS says the funds will be used to close the tax gap. White House.
The effort was also part of Treasury Secretary Janet Yellen’s directive to IRS leadership to avoid increasing audit rates for people making less than $400,000 a year, according to the report. luck.
“At a time when millions of hard-working people are paying their taxes correctly, we cannot tolerate high-income earners neglecting their basic civic duty to file their tax returns,” the IRS Commissioner said. said Danny Warfel in an article. release.
Meanwhile, law-abiding Americans are scheduled to file their 2023 tax returns with the IRS by April 15 at the latest.
While taxpayers are notorious for putting off filing until the dreaded tax day this year, struggling Gen Z and Millennial workers are rushing to file their taxes in hopes of getting a big refund.
In fact, a new study commissioned by Credit Karma shows that this time around, 54% of taxpayers in that age group wanted to get their 2023 refund sooner by rushing their documents to the proverbial post office. There is.
This number includes 64% of Gen Z filers between the ages of 11 and 27 and 65% of Millennials between the ages of 28 and 43, many of whom, the report’s authors say, will receive their subsidy refunds. He said that he is looking forward to it and is showing a sense of crisis. their income and debt repayments (34%);
Additionally, 38% of Gen Z and 40% of Millennials confess that they rely on refunds to pay for living expenses, including necessities like rent and groceries, and more than half blame rising costs of living on financial hardship. The answer is yes.
The IRS reportedly expects a total of 128.7 million individual tax returns to be filed by the April deadline of this year.
