IRS cracking down on 1,600 millionaires over back taxes on September 8, 2023 at 3:01 pm Business News | The Hill

The IRS is launching an initiative to crack down on 1,600 millionaires and 75 large businesses it says owe hundreds of millions of dollars in back taxes, the agency announced Friday.

The program takes advantage of additional funding for the agency included in the Inflation Reduction Act, which added funding to hire and replace 87,000 employees.

The audit rates on people making less than $400,000 per year will not change.

“The years of underfunding that predated the Inflation Reduction Act led to the lowest audit rate of wealthy filers in our history,” IRS Commissioner Danny Werfel said in a statement. “I am committed to reversing this trend, making sure that new funding will mean more effective compliance efforts on the wealthy, while middle- and low-income filers will continue to see no change in historically low pre-IRA audit rates for years to come.”

The shift in enforcement takes advantage of new artificial intelligence technology the agency described as “groundbreaking,” which can discover patterns of tax avoidance more easily than before.

“There is a sea change taking place at the IRS in every aspect of our operations,” Werfel said. “Anchored by a deep respect for taxpayer rights, the IRS is deploying new resources towards cutting-edge technology to improve our visibility on where the wealthy shield their income and focus staff attention on the areas of greatest abuse.”

The 1,600 millionaires targeted by the effort each owe more than $250,000 in back taxes each, and the companies, from a slew of different industries, have an average worth of $10 billion in assets, the agency said.

The additional IRS funding has come under scrutiny from Republicans, who have complained the money should be spent elsewhere. Amid negotiations over the debt limit this summer, Democrats agreed to reduce the funding boost the agency was to get by a quarter, to $60 billion.

Some experts are concerned Republicans will push for further cuts as the government approaches a potential shutdown at the end of September.

“I hope that my Republican colleagues on the House Appropriations Committee will work with Democrats to ensure the IRS has the resources they need to effectively carry out their responsibilities and serve the American taxpayers,” Rep. Steny Hoyer (D-Md.) told The Hill.

The IRS’s effort will begin as soon as next month, Werfel told reporters.

“We have more hiring to do,” he said. “It’s going to be a very busy fall for us.”

​Business, back taxes, Inflation Reduction Act, IRS, tax return The IRS is launching an initiative to crack down on 1,600 millionaires and 75 large businesses it says owe hundreds of millions of dollars in back taxes, the agency announced Friday. The program takes advantage of additional funding for the agency included in the Inflation Reduction Act, which added funding to hire and replace 87,000…