The IRS celebrated a success on Friday, announcing the retrieval of $482 million from 900 millionaires with outstanding tax debts. The agency also revealed its scrutiny of 76 large partnerships with an average of $10 billion in assets. Artificial intelligence is being utilized to streamline the selection process for enforcement targets, especially in cases that were historically difficult to handle due to their complexity.
In a year-end update, IRS Commissioner Daniel Werfel highlighted the addition of 560 new job offers in the past two months, specifically for accountants tasked with auditing the wealthy. The IRS expedited the hiring process by bringing on board 160 accountants in a two-day hiring event in Houston last month, significantly reducing the typical six-month duration for such procedures.
These initiatives were made possible by the funding approved by the Democrat-led Congress and President Biden in 2022 as part of the budget-climate bill.
Werfel stated, “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.”
Efforts to extract more from millionaires have been a focal point, driven by liberal advocacy groups and President Biden, who faces reelection concerns amid economic unease and inflation worries.
Werfel, in his memo, cited various criminal cases of tax evasion resulting in sentences. He also emphasized a deferred prosecution agreement with a Swiss bank that is set to pay $122.9 million to the federal government for aiding U.S. taxpayers in concealing wealth in undeclared accounts during the Bush and Obama administrations.
The $482 million collected from 900 millionaires is in addition to another group of 175 wealthy taxpayers who have paid $38 million towards their tax debts, bringing the total recovered from millionaires to $520 million, according to Werfel. He noted that there are still 700 millionaires within the target group, each having an annual income exceeding $1 million and unpaid taxes surpassing $250,000.
While the annual tax gap, representing the IRS-estimated unpaid owed amount, is nearly $700 billion, the half-billion dollar recovery initiative is seen as a step towards encouraging voluntary compliance and potentially reducing the overall gap.
