The IRS has announced a significant recovery of $1.3 billion from individuals attempting to evade taxes, specifically those in high-income brackets. This success follows increased funding aimed at enhancing tax collection efforts under the Biden administration’s landmark climate and health care legislation enacted in 2022.
In a recent statement, Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel highlighted their findings during a visit to an IRS facility in Austin, Texas. They noted that, back in 2019, the wealthiest one percent of Americans held over 20% of outstanding tax debts, which unfairly shifted the tax burden to average citizens. To address this disparity, the IRS has directed its resources toward crackdowns on tax avoidance, targeting wealthy taxpayers with annual incomes exceeding $1 million and substantial tax liabilities.
Yellen indicated that since the launch of the initiative aimed at high-wealth individuals, nearly 80% of those under scrutiny—the 1,600 millionaires identified—have made payments toward their outstanding debts, resulting in the recovery of over $1.1 billion. The IRS also reported that a new program began in February 2024 garnered $172 million from more than 21,000 affluent taxpayers who had not submitted tax returns since 2017.
Despite these efforts, some Republican leaders are advocating for cuts to IRS funding, threatening the sustainability of these initiatives. Former President Donald Trump’s campaign has promised to significantly reduce federal agency budgets, criticizing the current administration for hiring thousands of new IRS agents aimed at enforcing tax compliance.
In its ongoing modernization efforts, the IRS introduced a new feature called Direct File, simplifying the process for taxpayers with straightforward W-2 forms to file their returns directly with the agency. In a report issued in April, the IRS revealed that users of this program claimed over $90 million in refunds. The initiative, which included participation from 12 states during the 2024 tax season, is expected to expand its reach in the 2025 season, inviting additional states to join the program.
This proactive approach highlights the Biden administration’s focus on fair taxation and holding the wealthy accountable while simultaneously providing resources for more straightforward filing options for everyday taxpayers. The concerted effort to recover unpaid taxes not only underscores the government’s commitment to reducing the tax gap but also aims to ensure that all Americans contribute their fair share to federal revenues.