The IRS is displaying its new ability to aggressively scrutinize high-income tax evaders as it makes the case for sustainable funding and tries to head off budget cuts sought by Republicans who want to undermine the agency.
IRS leaders said they collected $38 million in back taxes from more than 175 high-income taxpayers in the past few months.
In one case, an individual used money owed to the government to purchase a Maserati and a Bentley, and approximately 100 high-income individuals attempted to obtain preferential tax treatment across Puerto Rico without meeting certain tax requirements. Many of these cases are expected to face a criminal investigation.
“It just shows you how much money is in back taxes, and there are so many cases that we have to address,” said Daniel Werfel, the new IRS commissioner, just four months into the business. “There’s just so much opportunity out there.”
The agency did not provide figures on how higher taxes were collected in dollars compared to previous years.
The federal tax collector’s enhanced ability to identify delinquent taxpayers comes from the resources provided by the Inflation Cut Act, Werfel said, on a call with reporters Thursday. passed last August by democrats.
The agency was willing to inject $80 billion in funds under the law, but that money is subject to potential cuts.
House Republicans cut $1.4 billion to the IRS debt ceiling and budget cuts package that Congress passed earlier this summer. The White House said the debt deal also includes a separate agreement to take $20 billion from the IRS over the next two years and funnel that money into other non-defense programs.
Now, the agency is trying to show the value of CIA funding to taxpayers as appropriations season approaches, and to show the impact of its efforts to do more to audit high-income taxpayers. Last summer, Treasury Secretary Janet Yellen He gave driving instructions to the IRS Not increasing audit rates on people making less than $400,000 a year, and focusing on higher-income taxpayers.
The IRS said its workers answered three million more phone calls than last filing season, cut wait times to three minutes from 28 and completely removed the backlog of unprocessed 2022 tax returns that had no errors. It opens new taxpayer assistance centers and organizes events to help people who live far from the agency’s personal offices.
“The mixed results here for some taxpayers, they’re still disappointing, and some taxpayers are seeing dramatic improvements that tell us we have more work to do,” Werfel said.
The number of law enforcement officers at the IRS has shrunk by about a third since 2010 and are working on outdated technology that the agency said is gradually automating.
In April, the agency released Summary report How will you spend the money allocated through the Reducing Inflation Act, such as bringing more paper systems online and answering taxpayer calls promptly.
Other plans are more ambitious, including exploring ways to create a government-run government Free electronic file The tax return system, which is currently being piloted.
The idea of providing additional funding to the agency has been politically contentious since 2013, when the IRS was found under the Obama administration to scrutinize political groups that applied for tax-exempt status.
The Treasury Department’s inspector general report found that both of them Conservative and liberal groups were selected for scrutiny.