In a formidable financial sweep, the Internal Revenue Service (IRS) has announced the recouping of an additional $122 million from 100 millionaires implicated in tax evasion activities.
This surge in recovered revenue comes in the wake of the agency receiving billions in funding earlier this year under the Inflation Reduction Act—a buried legislative endeavor aimed at boosting the IRS’s enforcement capabilities.
IRS Commissioner Danny Werfel revealed that these additional funds have empowered the agency to significantly intensify its pursuit of tax evaders among America’s ultra-rich.
“The funds that were collected should give you a fairly good idea of how much money is on the table for us to go to collect,” Werfel said.
Since the onset of the current year, the IRS has managed to reclaim a total of $160 billion. The crackdown features high-profile cases that read like a laundry list of white-collar transgressions.
One former CEO was sentenced to a year of incarceration and ordered to remit over $15 million, incurred from illegitimate deductions of personal expenditures, which were miscategorized as business expenses. Among these errant deductions were costs associated with constructing a 51,000-square-foot mansion, alongside extravagant items such as an outdoor pool and pool house, and sports courts including tennis, basketball and bocce ball.
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Additional instances highlighted by Werfel included a restaurant owner who gambled away hundreds of thousands of dollars from his business while filing fraudulent tax returns.
Another individual exploited COVID-relief loans to the tune of over $5 million for non-existent enterprises, funneling these funds into the acquisition of high-end sports cars like Ferraris, Bentleys, and Lamborghinis.
The IRS’s heightened focus is currently aimed at Americans earning over $1 million annually and are in tax debt exceeding $250,000.
An internal memo released by the agency had previously disclosed that close to 1,000 taxpayers earning upwards of $1 million had recurrently failed to file their taxes between 2015 and 2020.
A subset of this group, 58 individuals who earn at least $10 million, along with others in the same income bracket, were estimated to owe a staggering $34 billion in back taxes as of May 2023.
Just last month, the IRS initiated contact with 1,600 millionaires with tax debts above $250,000 with an aim to recoup those outstanding amounts.
The recent recovery of $122 million is incremental to the $38 million previously reclaimed from 175 high-income earners, summing up to a total of $160 million. But the IRS isn’t stopping there.
Officials have unveiled plans to shift their focus toward large corporations, particularly U.S. subsidiaries of foreign enterprises operating stateside but skirting appropriate tax contributions on profits.
Marking an escalation in its enforcement strategy, the IRS will enlist new accountants in early 2023. These accountants are slated to commence 60 audits targeting some of the country’s largest corporate taxpayers. As the IRS continues its broadening crackdown on tax evasion, the message sent to high-income and corporate America is unequivocal: The Taxman cometh, and he cometh with rigor.
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