December 22, 2024
$5 billion.
That’s how much money the IRS has recovered from wealthy tax cheats, big corporations and a whole bunch of other financial criminals. But all these efforts may be coming to an end very soon. Before I tell you about that, let me explain all this money.
I have been reporting for more than a year that the IRS has been on this mission to go after wealth tax cheats who haven’t been paying their tax bills — wait for it – since 2017! The IRS identified a group of rich folks who make more than a million dollars a year in taxable income and have more than $250,000 in recognized tax debt. By early 2024 — after doing all the legwork to pull W2s and 1099s the IRS discovered all kinds of income these people weren’t paying taxes on. In the first six months of this program the IRS forced the first 21,000 wealthy folks to pay $172 million in back taxes. And in just the last three months – the IRS added another $120 million to the pot from another 7,000 wealthy folks. That brings the total amount of money the IRS has clawed back from wealthy tax cheats since the program began — to $1.3 billion. One billion dollars is a lot of money. And that doesn’t include the money the IRS is clawing back from big corporations who are also not paying what they owe.
On top of the wealthy tax cheats and corporations the IRS says they pulled in almost 3 billion dollars thanks to financial crimes investigations like drug trafficking, cyber crime and terrorists financing.
So why wasn’t this all happening before? Because frankly – the irs didn’t have the money and resources to do it. Wealthy folks and big corporations know how to get very creative with their tax returns and it takes human IRS agents time and effort to unravel these schemes. That’s why in 2022 congress gave the IRS tens of billions of dollars over ten years to do stuff like this, but also to hire more people to answer your phone calls, to staff IRS offices to help you in person and to bring the IRS’s technology out of the stone age so all of us could be able to file our taxes directly through the IRS’s website and have actual personalized online IRS accounts that tell us what’s happening with our tax refunds. Just as a few examples.
But the IRS is in jeopardy of losing some or all of that funding because of the incoming congress and the new Trump administration. Elon Musk – who the president elect nominated to be in charge of the Department of Government Efficiency just said he doesn’t want to just cut all the funding for the IRS – he wants to “delete” the agency completely. Now – let’s be real – that’s unlikely to happen. IRS tax collection is the primary source of federal funding. That’s how our government is able to do anything at all. If the IRS isn’t there to collect the trillions of dollars in taxes every year then what money will the US government use to operate with? But even if congress – and let me be clear – it will have to be congress – decides to cut the billions of dollars the IRS is set to receive over the next eight years – it’s very possible all this stuff will go away. Plus it might also be very difficult to actually carry out the tax cuts that trump and the republican party wants to enact in 2025 without enough staff at the IRS.
Read more about it from the IRS here.
