A crackdown on cheating by high-income households and complex businesses is paying off, the IRS said Friday as it announced that it has now recovered more than $520 million from 1,600 millionaires who were behind on their taxes.
The IRS said it recovered $360 million from high-income individuals who owe at least $250,000 in back taxes. That’s on top of the roughly $160 million the agency said it had recovered as of last October.
IRS Commissioner Danny Werfel said the additional funding provided by the Inflation Reduction Act was helping the agency in its effort to recover more unpaid taxes owed by the rich.
“The IRS continues to increase scrutiny on high-income taxpayers as we work to reverse the historic low audit rates and limited focus that the wealthiest individuals and organizations faced in the years that predated the Inflation Reduction Act,” Werfel said. “We are adding staff and technology to ensure that the taxpayers with the highest income, including partnerships, large corporations and millionaires and billionaires, pay what is legally owed under federal law.”
Signed into law in 2022, the IRA provided $80 billion in additional funding for the IRS over 10 years, with the goal of improving customer service and enhancing enforcement, especially against high-income households and businesses. However, Republicans in Congress have pushed to repeal that funding and with the latest budget deal, they will have clawed back $20 billion of the money intended to ramp up enforcement.
Despite the success in recovering unpaid taxes so far, Republicans reportedly plan to continue to target enforcement funding. “In little more than a year since Democrats’ [Inflation Reduction Act] was enacted, Republicans have now repealed roughly half of the funding Democrats handed the IRS to ramp up audits on taxpayers,” anti-tax crusader Grover Norquist told The Washington Post. “More cuts to the IRS will come.”
