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Tags: irs | taxes | inflation reduction act

IRS Millionaire Crackdown Nets $160M in Back Taxes

By    |   Friday, 20 October 2023 03:04 PM EDT

The Internal Revenue Service announced Friday that it collected $160 million in back taxes this year after a crackdown on millionaires who have not paid the government what they owe. 

The agency started seeking back taxes in September from approximately 1,600 taxpayers whose income is above $1 million and owed more than $250,000 in tax debt and has already closed 100 of those cases and collected $122 million, according to CNN.

The IRS also earlier this year brought in $38 million from 175 high-income people, bringing the total to $160 million. 

The effort has been spurred in part through an increase in federal funding through last year's Inflation Reduction Act. Future funding for the act is not certain, as Republicans have been criticizing the amount of money that was allocated. 

"I think that the evidence that we've seen to date, in terms of the amount that we have recovered … points to this being a highly important effort for us," IRS Commissioner Danny Werfel told reporters Friday. 

In one case alone, a millionaire was ordered to pay more than $15 million in restitution after it was determined he had falsified his personal expenses as being deductible for business purposes. 

This included building a 51,000-square-foot mansion with an outdoor pool and pool house, along with tennis, bocce, and basketball courts, and falsifying expenses for luxury vehicles, country club memberships, and homes for his children. 

Another of the millionaires pleaded guilty last week to skimming more than $670,000 from his business, spending $110,000 on personal expenses and $502,000 on gambling. 

However, the $160 million collected is just a drop in the bucket compared to recent estimates showing that $688 billion in taxes was not collected in 2021. 

The IRS is also planning to crack down on corporations that have not been paying their taxes, including American subsidiaries of foreign companies distributing goods in the United States. 

About 150 subsidiaries are to get notices, starting next month, ordering them to comply and to "reiterate their U.S. tax obligations and incentivize self-correction."

New accountants are also coming into the IRS in early 2024 when they are to begin audits on 60 of the nation's largest corporate taxpayers to be selected through the use of artificial intelligence and subject matter expertise that will detect tax cheating. The use of technology is meant to help avoid burdening taxpayers with needless audits.

The Inflation Reduction Act includes a provision to deliver $80 billion to the IRS over 10 years, and as a result, the agency is working to hire new staff, audit tax cheaters, and more.

The IRS is also planning to launch its own free tax filing, Direct File, as a limited pilot program next year, and plans to digitize all paper-filed tax returns by 2025. 

 

Sandy Fitzgerald

Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics. 

© 2024 Newsmax. All rights reserved.


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The Internal Revenue Service announced Friday that it collected $160 million in back taxes this year after a crackdown on millionaires who have not paid the government what they owe. The agency started seeking back taxes in September from approximately 1,600 taxpayers whose ...
irs, taxes, inflation reduction act
461
2023-04-20
Friday, 20 October 2023 03:04 PM
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