WASHINGTON (AP) — The IRS has collected $1.3 billion from wealthy tax evaders since last fall, the agency said Friday. The agency attributes the augment to spending that increased tax collection enforcement as part of the climate, health and tax package signed by President Joe Biden that is set to take effect in 2022.
Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel traveled to Austin, Texas, to tour an IRS campus and announce the latest tax collection milestone, while Republicans are warning of major future budget cuts to the tax agency if they take over the White House and Congress.
Yellen said in a speech in Austin that the top one percent of wealthy Americans owed more than a fifth of all unpaid taxes in 2019, leaving “the burden on ordinary Americans.”
“To fix this problem, we have directed IRS funds to make significant investments to combat tax evasion,” she said.
In 2023 and 2024, the IRS launched a series of initiatives aimed at going after high-net-worth individuals who have not paid their tax debts. The IRS said the campaign focuses on taxpayers with incomes of more than $1 million and more than $250,000 in recognized tax debt.
Agency officials said that since the program launched, nearly 80% of the 1,600 millionaires targeted by the IRS for failing to pay a delinquent tax debt have now made a payment, resulting in more than $1.1 billion in recoveries. And in the first six months of a recent initiative in February 2024, the IRS has collected $172 million from 21,000 wealthy taxpayers who had not filed tax returns since 2017.
Republicans have called for cuts in funding for the IRS.
Donald Trump’s presidential campaign said he would drastically cut spending on federal agencies – and Democratic candidate Kamala Harris “cast the deciding vote to hire 87,000 new IRS agents to handle tip revenue.”
This debunked claim stems from a plan the Treasury Department proposed in 2021 to hire as many IRS employees over the next decade if it got the money to do so. At least 50,000 IRS employees are expected to retire over the next five years.
The National Taxpayer Advocate, the IRS’s independent oversight agency, released an annual report for 2023 saying the IRS employs about 681 armed agents.
As part of its modernization efforts, the agency also launched a program this year called Direct File, which allows people with very basic W-2 forms to calculate and submit their tax returns directly to the IRS. The IRS announced in April that users of this program filed more than $90 million in refunds.
While 12 states participated in the program for the 2024 tax season, additional states have been added for the 2025 tax season, including Maryland, Oregon, New Jersey, Pennsylvania, New Mexico, Connecticut, North Carolina, Wisconsin and Maine.
