IRS Sending Compliance Letters to 100,000 Americans, Thanks to Biden’s Inflation Reduction Act

IRS Targets High-Income Non-Filers

The IRS Compliance Letters

The Internal Revenue Service has initiated a new campaign to address tax non-compliance, sending out over 125,000 compliance letters to individuals who have failed to pay their taxes. This effort is part of the IRS’s utilization of funds allocated under the Inflation Reduction Act, as outlined in an IRS news release.

The CP59 notices of a failure to file will address tax years from 2017 through 2021.

Income Thresholds

The IRS will be sending 25,000 letters to individuals with income exceeding $1 million who have neglected to file a tax return. Additionally, over 100,000 letters will be dispatched to individuals with incomes ranging from $400,000 to $1 million who are non-compliant with their tax obligations.

Tracking and Revenue Expectations

The IRS employed third-party information such as W-2 and 1099 forms to identify individuals who received income but did not file tax returns. The IRS anticipates that the financial activity documented in the letters surpasses $100 billion, although the actual tax revenue gain remains uncertain due to potential credits and deductions for the non-compliant individuals.

The IRS commissioner, Danny Werfel, highlighted the significance of tax compliance, emphasizing the need for high-income individuals to fulfill their civic duty by filing tax returns. The IRS aims to combat tax evasion through this enforcement action.

Enforcement and Responses

The IRS disclosed that it has recouped nearly $500 million from 1,600 millionaires who were pursued for unpaid taxes, with ongoing efforts in this area. Artificial intelligence tools are being utilized by the IRS in examining the financial activities of the nation’s largest partnerships.

David Kass of Americans for Tax Fairness criticized the non-compliance of wealthy individuals, underscoring the importance of IRS enforcement to ensure tax fairness and prevent tax evasion.

Read More of this Story at – 2024-03-02 23:19:00

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