IRS to target wealthy non-filers
Breaking News: IRS Targets High-Income Earners Who Failed to File Tax Returns
WASHINGTON (Reuters) – The Internal Revenue Service announced on Thursday its renewed efforts to pursue high-income earners who have neglected to file tax returns, with over 125,000 cases identified since 2017. This non-filer enforcement program, previously hindered by budget cuts, is now back in action.
The IRS, fueled by $80 billion in funding from the 2022 Inflation Reduction Act, has been able to hire additional staff and resume sending non-filing notices to these individuals. Among them are 25,000 individuals with apparent income exceeding million.
Based on third-party documents, the total “financial activity” generated by these non-filers surpasses $100 billion, and their unpaid tax liabilities could easily reach hundreds of millions of dollars, according to IRS Commissioner Danny Werfel.
“With the resources provided by the Inflation Reduction Act, the agency finally has the means to fulfill this crucial responsibility and ensure fairness for all those who have complied with the rules,” Werfel stated.
Due to staff reductions resulting from budget cuts passed by Republicans in Congress, the non-filer enforcement program has only been sporadically operational since 2016. The agency needed sufficient staff to pursue collections of delinquent tax debts related to the notices.
However, since the IRA funding was passed in 2022, the IRS has hired up to 7,000 new customer service staff, account managers, and collections staff, as well as implemented new automation technology, enabling them to target high-income non-filers.
The agency has already begun sending out notices this week, with approximately 20,000 to 40,000 notices being dispatched each week.
Reporting by David Lawder in Washington Editing by Matthew Lewis
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How did budget cuts impact the previous enforcement efforts of the IRS’s non-filer program?
Iler enforcement program was largely halted in recent years. This lack of action led to a significant increase in the number of high-income earners neglecting to file their tax returns.
However, with the infusion of funding from the 2022 Inflation Reduction Act, the IRS is now able to ramp up efforts to identify and pursue these non-filers. Since 2017, over 125,000 cases have been identified, including 25,000 individuals with income exceeding $1 million. The total financial activity generated by these non-filers is estimated to be over $100 billion, with potential unpaid tax liabilities reaching hundreds of millions of dollars.
IRS Commissioner Danny Werfel highlighted the importance of these enforcement efforts, stating, “With the resources provided by the Inflation Reduction Act, the agency finally has the means to fulfill this crucial responsibility and ensure fairness for all those who have complied with the rules.” The additional funding has allowed the IRS to hire more staff and resume sending non-filing notices to these individuals.
The non-filer enforcement program was previously hindered by budget cuts, which resulted in staff reductions and limited resources. These constraints significantly impacted the IRS’s ability to address this issue effectively. However, with the renewed focus and funding, the agency is now able to take action and hold high-income earners accountable for their tax obligations.
The announcement of the IRS’s intensified efforts serves as a reminder to all individuals, particularly those with high incomes, of the importance of filing their tax returns accurately and on time. By neglecting to do so, individuals not only risk enforcement actions but also hinder the government’s ability to fund essential programs and services.
In conclusion, the IRS’s renewed efforts to pursue high-income earners who have neglected to file tax returns is a significant step towards ensuring fairness and compliance with the tax laws. With increased funding and resources, the agency is poised to address the issue more effectively and hold those who fail to meet their tax obligations accountable. This initiative also serves as a reminder to all individuals of the importance of fulfilling their tax responsibilities in a timely and accurate manner.
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