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IRS targets tax evasion: Who is a high-earner? What’s inside enforcement effort?

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  • Staff Report 

The Internal Revenue Service (IRS) has set its sights on high-income Americans who have neglected a fundamental responsibility: filing their tax returns. With an initiative aimed at those earning over $400,000 annually, the IRS announced it will be sending notices to about 125,000 individuals who have failed to file in at least one year since 2017.

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This crackdown is part of a broader effort to tackle tax evasion among the wealthy. Although the total amount of unpaid taxes is not specified, it’s suggested that these non-filers are linked to financial activities surpassing $100 billion.

IRS Commissioner Danny Werfel emphasized the importance of this enforcement, especially during tax season. “As millions of hard-working people pay their taxes, it’s unacceptable for the wealthy to shirk this basic civic duty,” Werfel stated. The IRS’s message is clear: everyone must play by the rules, including the affluent.

The campaign will focus first on those with the highest incomes, sending between 20,000 to 40,000 letters weekly. Those targeted include 25,000 individuals making over $1 million and 100,000 earning between $400,000 to $1 million. The agency warns of significant penalties for non-compliance, ranging from fines to potential criminal prosecution. Non-filers are urged to consult tax professionals and file their returns promptly to avoid further action.

This enforcement push is enabled by recent funding from the Inflation Reduction Act, highlighting the critical need for a well-resourced IRS. “This effort underscores the significance of adequately funding the IRS,” Werfel added, noting the new resources help ensure fairness and compliance across the board.

As the IRS steps up its efforts, it sends a strong message about the importance of tax compliance, aiming to level the playing field for all taxpayers.

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