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Boost IRS Revenue with $38 Million Collected in Delinquent Taxes via IRA Funds



**Higher Income Tax Dodgers Face Aggressive Audits as IRS Seeks Funding**

The IRS is highlighting its ability to conduct aggressive audits on high-income tax dodgers as it advocates for sustained funding and works to avoid budget cuts proposed by Republicans who aim to weaken the agency.

**Delinquent Taxes Collected from High-Income Taxpayers**

According to IRS leaders, they have collected $38 million in delinquent taxes from over 175 high-income taxpayers in recent months.

**Notable Cases of Tax Evasion**

One individual used the money owed to the government to purchase a Maserati and a Bentley, while around 100 high-income individuals attempted to exploit favorable tax treatment through Puerto Rico without meeting certain tax requirements. Many of these cases are expected to undergo criminal investigation.

**Significant Opportunity for the IRS**

New IRS Commissioner Daniel Werfel, who has been in the position for just four months, expressed that these cases demonstrate the substantial amount of delinquent taxes that exist and the numerous opportunities for the IRS to address them.

**Comparative Figures Unavailable**

The agency did not provide statistics comparing high-dollar tax collections with previous years.

**Enhanced Ability to Identify Tax Delinquents**

Werfel mentioned that the IRS’ improved ability to identify tax delinquents stems from resources provided by the Inflation Reduction Act, passed last August by Democrats.

**Potential Budget Cutbacks**

Despite being eligible for an $80 billion funding boost under the law, the allocated money is at risk of potential cutbacks.

**IRS Funding Reduction by House Republicans**

House Republicans included a $1.4 billion reduction in funding for the IRS in the debt ceiling and budget cuts package passed by Congress earlier this summer. Additionally, a separate agreement in the debt deal entails diverting $20 billion from the IRS to other non-defense programs over the next two years.

**Showcasing the Value of Inflation Reduction Act Funding**

The agency is now aiming to demonstrate the value of the funding provided by the Inflation Reduction Act for taxpayers as the appropriations season approaches, as well as the impact of their efforts to audit high-income taxpayers. Last summer, Treasury Secretary Janet Yellen instructed IRS leadership not to increase audit rates for individuals earning less than $400,000 annually, focusing instead on high-income taxpayers.

**Improving Taxpayer Assistance and Service**

The IRS reported that its workers answered three million more phone calls compared to the previous filing season, reduced wait times from 28 minutes to three minutes, and eliminated the backlog of unprocessed 2022 tax returns without errors. The agency is establishing new taxpayer assistance centers and organizing events to assist individuals who live far from their in-person offices.

**Shrinking Enforcement Staff and Outdated Technology**

The IRS’s enforcement staff has decreased by approximately one-third since 2010. Additionally, the agency has been operating with outdated technology, which it is gradually automating.

**Spending Plans for Inflation Reduction Act Funding**

In April, the IRS released a report outlining its plans for allocating the funds provided through the Inflation Reduction Act. These plans include transitioning more paper-based systems online and ensuring prompt response to taxpayers’ phone calls. The agency is also exploring the possibility of creating a government-operated electronic free-file tax return system, currently being piloted.

**Political Controversy Surrounding Funding Increase**

Since 2013, the idea of providing additional funding for the IRS has been politically controversial. This controversy emerged when the IRS, under the Obama administration, was found to have scrutinized political groups that applied for tax-exempt status. A report from the Treasury Department Inspector General revealed that both conservative and liberal groups were subjected to scrutiny.



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