IRS Strikes Gold: $1 Billion Collected From Wealthy Tax Dodgers

The Biden administration has collected $1 billion - a few days worth of Ukraine funding - from wealthy tax cheats, in what the Associated Press frames as a showcase of how the agency is making use of monies received from the Inflation Reduction Act of 2022.

The outlet suggests that the announcement is part of a public push to raise awareness that a Republican takeover of the White House or Congress could mean future budget cuts for the IRS - which last year launched a series of initiatives aimed at pursuing high-wealth individuals who have shirked their tax obligations.

According to the agency, the campaign is focused on taxpayers with over $1 million in income and over $250,000 in recognized tax debt.

"President Biden’s Inflation Reduction Act is increasing tax fairness and ensuring that all wealthy taxpayers pay the taxes they owe, just like working families do," said Treasury Secretary Janet Yellen in a statement.

Among the initiatives are measures to halt “partnership basis shifting,” potentially raising $50 billion over the next decade, and targeting improper deductions on personal flights via corporate jets. Eugene Steuerle from the Urban-Brookings Tax Policy Center emphasized the positive impact of these efforts, suggesting increased public support for the IRS if they "can show they’re having a positive impact and it’s not impacting average American taxpayers, there would be more public support for this activity and the agency."

That said, Republicans are not backing down from threats to make deep cuts to the IRS.

House Republicans built a $1.4 billion reduction to the IRS into the debt ceiling and budget cuts package passed by Congress in the summer of 2023. The deal included a separate agreement to take $20 billion from the IRS over the next two years and divert that money to other non-defense programs.

House Republicans’ fiscal year 2025 proposal out of the Financial Services and General Government Subcommittee in June proposes further cuts to the IRS in 2025, and would cut funding to the Direct File program that is being expanded to allow Americans to file their taxes directly with the IRS. -AP

All of that said- according to Demian Brady, VP of research for the National Taxpayers Union Foundation, says that the IRS is still targeting non-high net worth partnerships for audits. 

"It should also be noted that nearly two-thirds of audits initiated in 2023 were on those making less than $200,000."