The IRS said Thursday that it has collected more than $1 billion in taxes from wealthy taxpayers this year, calling it a “major milestone” and an attempt by Republican lawmakers to sway public opinion about the agency as they fight budget cuts.
The department first announced plans in September to step up scrutiny of people who earn more than $1 million a year and have more than $250,000 in debt.
The $1 billion goal is the department’s attempt to prove it is using the roughly $80 billion in funding from President Biden’s Inflation Control Act of 2022 effectively.
Treasury Secretary Janet Yellen said the IRS “has successfully launched a strategic new initiative and demonstrated that it can achieve the greatest return on investment.”
The Treasury Department proposed rules in June that would bar companies and individuals from transferring assets to avoid paying more taxes.
The department also announced a crackdown on companies that are improperly deducting expenses for personal flights on corporate jets and on a group of wealthy individuals who owe hundreds of millions of dollars in back taxes.
The moves are likely an attempt to galvanize public opinion ahead of Republicans winning the White House and Congress and potentially leading to budget cuts. Republicans often argue that increased IRS funding, and therefore taxpayer oversight, would hurt middle-class taxpayers and small business owners.
The IRS and Treasury Department said in February that the agencies could generate as much as $851 billion by 2034 if funding remains intact.
IRS Commissioner Danny Wuerfel said the agency didn’t have the resources to pursue high-income tax evaders before the 2022 tax hikes.
“The difference is really like night and day,” he said.
Audit rates have fallen significantly over the past decade, from 7.2% in 2011 to 0.7% in 2019, according to the IRS.
But the massive 2022 tax reform bill passed by Senate Democrats faces opposition from the right.
House Republicans included IRS funding cuts in a budget cut package passed by Congress last summer, which also included a deal to reallocate $20 billion from the IRS to other agencies over the next two years.
The House Republicans’ fiscal 2025 budget proposal also includes further cuts to the IRS.
Despite publicized crackdowns on tax evasion by high-income individuals, the IRS still primarily audits non-high-income individuals.
“Nearly two-thirds of audits initiated in 2023 were of people making less than $200,000 a year,” said Demian Brady, vice president of research at the National Taxpayers Union Foundation.
