IRS Hits Milestone: Collects Over $520 Million from Wealthy Taxpayers in Back Taxes
The IRS said on Friday that it has recently been able to collect almost $500 billion from wealthy Americans who have unpaid taxes.
The agency hailed the Inflation Reduction Act’s passing for enabling it to pursue “high-income, high-wealth individuals,” intricate partnerships, and huge firms that fail to pay past-due taxes.
The IRA, which President Joe Biden pushed for and was enacted in 2022, set aside $80 billion to be used over ten years to strengthen the IRS’s enforcement capacity. The agency stated it had already used its initial grant of $20 billion, even though the amount was ultimately taken back in 2023 as part of the agreement to avert a debt limit crisis.
The IRS said that over the previous year, law enforcement officials had recovered around $520 million from the wealthiest members of society.
“As we strive to undo the historically low audit rates and narrow focus that the wealthiest individuals and organizations faced in the years that preceded the Inflation Reduction Act,” IRS Commissioner Danny Werfel stated in a release, “The IRS continues to increase scrutiny on high-income taxpayers.”
“We are adding staff and technology to ensure that the taxpayers with the highest income, including partnerships, large corporations, and millionaires and billionaires, pay what is legally owed under federal law.”
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The Biden administration had previously promised to freeze audit rates for taxpayers with less than $400,000.
The IRS stated in its release that individuals with incomes above $1 million and tax debts over $250,000 have been the focus of its most recent efforts. It grew to 1,600 new taxpayers in this category who owe hundreds of millions in taxes last fall after an initial wave of audits of 175 high-income earners produced $38 million. In the end, $482 million was collected.
According to the agency, it has also focused on 76 of the biggest corporate partnerships in the United States, with combined assets of over $10 billion, whose arrangements might raise compliance issues. As per the agency, the partnerships encompass various industries such as publicly traded partnerships, hedge funds, real estate investment partnerships, huge law firms, and others.
For NBC News Digital, Rob Wile covers breaking business news.