Washington CNN –
Thank you for reading this post, don't forget to subscribe!The Internal Revenue Service has collected $160 million in back taxes this year by cracking down on millionaires The agency said on Friday that he had not paid his dues.
The recent effort to target higher-income individuals has been boosted by an increase in federal funding provided by Democrats through the Inflation Reduction Act last year. Republicans have criticized the amount of money the IRS is receiving, and future funding is uncertain.
In September, the IRS began demanding back taxes from about 1,600 taxpayers with income over $1 million and tax debt over $250,000. So far, the IRS has closed 100 of those cases and collected $122 million, the IRS said Friday.
Earlier this year, the IRS collected $38 million from more than 175 high-income people. This brings the total so far this year to $160 million.
“I think this is an extremely significant effort for us in terms of the evidence we’ve seen so far, the amount of money we’ve recovered,” IRS Commissioner Danny Werfel told reporters.
In a successful case, a A man was ordered last month to pay more than $15 million in restitution for misrepresenting personal expenses as deductible business expenses, including an outdoor pool and pool house as well as tennis, basketball And that included building a 51,000-square-foot mansion with Bocuse. According to an IRS press release, the courts. The man also embezzled expenses for luxury vehicles, artwork, country club memberships, and homes for his children.
Another man pleaded guilty last week to filing false tax returns and embezzling more than $670,000 from his business. The IRS said the man spent $110,000 on personal expenses and $502,000 on gambling.
The agency’s effort to speed up enforcement is aimed at reducing what is known as the “tax gap,” which is the difference between the amount owed and the amount actually collected by the IRS at the time. The most recent estimates show that $688 billion was not collected during the tax year 2021.
The IRS is planning to bring a new focus to crack down on big corporations that are not paying their owed taxes.
The agency will target US subsidiaries of foreign companies that distribute goods in the US and do not pay taxes owed on the profits they make. The announcement said it will begin sending compliance notices to approximately 150 subsidiaries next month to “reiterate their US tax obligations and encourage self-correction.”
As new accountants arrive at the IRS in early 2024, they are expected to begin 60 audits of some of the largest corporate taxpayers. Target corporations will be selected by IRS accountants Using a combination of artificial intelligence and subject matter expertise This will enable better detection of tax fraud. The use of technology is intended to help avoid placing the burden of unnecessary audits on taxpayers.
The Inflation Reduction Act, which includes a provision to give the IRS $80 billion over 10 years, has allowed the agency to begin Complete reconstruction of its operations. It is working to hire new staff, update technology, improve taxpayer services and audit tax fraud.
The new funds have already helped improve taxpayer services at the IRS. In the 2023 filing season, it answered 3 million more calls and reduced phone wait times from 28 minutes to three minutes compared with the previous year.
The IRS is currently working on creating its own free tax filing program, known as Direct File, which will launch as a limited pilot program next year.
The IRS also plans to digitize all paper-filed tax returns by 2025. The move is expected to cut processing times in half and speed up refunds by four weeks.
Republicans have questioned whether the $80 billion investment in the IRS will increase audits for average Americans. Earlier this year, Republican lawmakers were able to recoup $20 billion in funding in a bipartisan agreement to address the debt ceiling.
The White House argued that the cuts would not fundamentally change what the IRS can do over the next few years. Biden administration officials have also repeatedly said that taxpayers earning less than $400,000 a year will not face an increase in audits because of the new funding.
Source: www.cnn.com
