September 28, 2024
Oooohhh…someone’s in trouble with the IRS…
Actually it’s a bunch of people and because of it the IRS has now recovered one-point-three billion dollars from thousands of wealthy Americans who the IRS says were just not paying their taxes and had been getting away with it for years.
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Ok — I’ve been telling you since 2023 that the IRS has been using a small portion of $80 billion dollars Congress gave them in the Inflation Reduction Act to hire more IRS agents and upgrade their technology so they can cut through the schemes that these wealthy people had been using for years to cover up what they actually owed. And by wealthy I mean people who make high six figures or more than a million dollars every year in taxable income.
Since 2023 the IRS has been using all these new agents and technology to go after taxpayers with more than a million dollars a year in taxable income who have more than $250,000 in recognized tax debt. That means the IRS knows these people owe that money but because of complicated tax schemes and lack of resources, the IRS just couldn’t go after them. Until now. By the fall of 2023 the IRS had targeted 1600 more wealthy tax cheats. And as of September 2024, the IRS says they have recovered $1.1 billion from about 80% of them. That means there’s still more money to be collected from that other 20%.
On top of that in early 2024 the IRS went after another 125,000 wealthy Americans who had not filed any taxes since 2017. And after doing all the legwork to pull W2s and 1099s they discovered all kinds of income that they weren’t paying taxes on. Well in the first six months of this program the IRS got the first 21,000 wealthy folks to pay $172 million in back taxes.
So why should you care? Well – one – if you and I have to pay taxes shouldn’t the wealthy folks be doing the same? And two — that more than a billion dollars that was sitting in these rich peoples’ bank accounts is money that should have been added to the pot of money the US government uses to fund all kinds of things including programs that benefit kids, and lower income Americans and our seniors and veterans.
Also – it’s worth noting the IRS isn’t just using the money congress gave them to go after wealthy tax cheats – they’re also using a portion of the money to hire folks to answer the phones — improve online tax services for all of us to use and create the direct file tool which allows all US taxpayers to file taxes for free directly to the IRS without having to buy third party software.
Read more about the enforcement from the IRS here.
