Biden’s Policy Aims to Aid IRS in Recovering $851 Billion in Unpaid Taxes from Ultra-Wealthy Individuals

New Initiatives by IRS to Collect Additional Tax Revenue

New Initiatives by IRS to Collect Additional Tax Revenue

The Internal Revenue Service (IRS) is set to collect hundreds of billions of dollars of additional tax revenue by targeting the overdue and unpaid taxes of the ultra-wealthy.

The IRS is taking advantage of funding from President Biden’s Inflation Reduction Act (IRA) to boost its efforts in collecting unpaid taxes. The agency aims to collect a significant amount of tax revenue from the ultra-wealthy individuals and corporations.

Projected Increase in Tax Revenues

New estimates released by the Treasury Department and the IRS indicate that tax revenues are expected to rise by as much as $561 billion from 2024 to 2034, thanks to increased enforcement made possible by IRA funding.

If the IRA funding is renewed once it expires, the additional revenues could reach as much as $851 billion, according to the Biden administration’s proposal.

Successful Collection Efforts

The IRS has already collected over $520 million from 1,600 millionaires who had unpaid tax bills of more than $250,000, thanks to the infusion of funds provided by the 2022 law.

Focusing on the Ultra-Wealthy

The Treasury and the IRS have made it clear that their efforts are concentrated on tracking down wealthy individuals and businesses with unpaid or overdue tax bills. Families earning under $400,000 per year are not the target of these enforcement actions.

Prioritizing Fairness in the Tax System

President Biden has made it a priority to make the nation’s tax system more fair. He has proposed a billionaire tax and pledged not to raise taxes on families earning under $400,000 per year.

“I just want everybody to pay their fair share,” said President Biden at a campaign event in November. He emphasized the need to close the gap between the taxes paid by corporations and billionaires compared to school teachers and other middle-class workers.

Opposition and Loopholes

Republican lawmakers have been attempting to cut IRS funding, prioritizing the interests of the wealthiest Americans and big corporations over deficit reduction efforts.

Recent news of a tax loophole that allowed the richest Americans to accumulate $8.5 trillion in untaxed profits in 2022 has further highlighted the need for increased enforcement.

Challenges Faced by the IRS

The audit rate of millionaires and large corporations fell significantly from 2010 to 2019 due to budget cuts imposed on the IRS. Ensuring that people actually pay their taxes has become one of the agency’s biggest challenges.

According to the IRS, the tax gap, which represents the difference between taxes owed and taxes paid, has grown to over $600 billion annually.

  • Isabel Soisson

    Isabel Soisson is a multimedia journalist who has worked at WPMT FOX43 TV in Harrisburg, along with serving various roles at CNBC, NBC News, Philadelphia Magazine, and Philadelphia Style Magazine. – 2024-02-09 22:24:10

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