IRS Goes After 125,000 Wealthy Tax Evaders

The Internal Revenue Service (IRS) launched a renewed effort to hold high-income earners accountable for unpaid taxes, targeting over 125,000 individuals who have allegedly neglected their tax obligations since 2017.

The group includes 25,000 individuals with annual incomes exceeding US$1 million and over 100,000 earning over US$400,000 a year.

The #IRS is addressing 125,000+ cases involving high-income earners, including millionaires, who failed to file taxes. Learn more about IRS efforts to ensure fairness at: https://t.co/DGcAgeGv6K pic.twitter.com/F1aC1Z8e7A

— IRSnews (@IRSnews) March 3, 2024

The IRS identified these individuals through third-party information like W-2 and 1099 forms, which showed a significant discrepancy between reported income and their actual financial activity, estimated to exceed US$100 billion collectively.

Funding constraints had limited the agency’s ability to pursue such cases. It took up the task recently after receiving additional funding following the implementation of the Inflation Reduction Act.

While the exact amount of owed taxes remains unknown, media estimates suggest these individuals may owe millions of dollars collectively. The IRS emphasizes that the alleged tax evaders  will face penalties and must comply with tax laws.

Many affluent individuals employ increasingly complex tax avoidance strategies, making it challenging for the agency to maintain effective oversight.

For example, the IRS recently announced an audit of corporate tax filings related to private jet usage. The aim is to determine if these jets are used for personal purposes by executives and improperly claimed as business expenses.