IRS Touts Success of Initiatives Targeting High-Income Taxpayers

The Internal Revenue Service (IRS) is touting the success of two ongoing initiatives targeting high-income and high-net-worth taxpayers. In a News Release issued earlier this month, the IRS reported that these initiatives have resulted in $1.3 billion in taxes, interest, and fees recovered over the year. Learn more from Boston tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

The IRS is Prioritizing High-Income and High-Net-Worth Taxpayer Enforcement in 2024 (and Beyond)

The IRS’ September 6, 2024 News Release highlights the agency’s renewed efforts to target high-income and high-net-worth taxpayers after it received additional funding under the Inflation Reduction Act. It launched the first of its two ongoing initiatives in the fall of 2023. This initiative is focused on “pursu[ing] high-income, high-wealth individuals who have failed to pay recognized tax debt, . . . concentrat[ing] on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt.” While the IRS notes that it was previously unable to effectively target these taxpayers “due to lack of resources,” in the past year it has collected more than $1.1 billion from approximately 1,600 taxpayers—or an average of roughly $700,000 per taxpayer.

The IRS launched the second of its high-income taxpayer enforcement initiatives in February 2024. This initiative is focused on targeting “125,000 high-income, high-wealth taxpayers who have not filed taxes since 2017. . . . where IRS has received third party information—such as through Forms W-2 and 1099s—indicating these people received income between $400,000 and $1 million or more than $1 million, but failed to file a tax return.” According to the IRS’s News Release, this initiative has resulted in the recovery of $172 million in back taxes from about 21,000 taxpayers over the past six months, indicating that it is still very much underway.

Options for High-Income and High-Net-Worth Taxpayers Who Owe the IRS

If you are a high-income or high-net-worth taxpayer and you are behind on your obligations to the IRS, what does this mean for you? In general, if you are behind on your federal tax obligations, a proactive approach is best. While there are options available to taxpayers with delinquent liabilities, once the IRS initiates an audit or investigation, some of these options go off of the table. The IRS also typically takes a more aggressive approach to enforcement once it invests resources in an audit or investigation, and this can make it more difficult (though not impossible) to avoid unnecessary liability.

Schedule a Confidential Consultation with Boston Tax Lawyer Kevin E. Thorn

Boston tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, has extensive experience representing high-income and high-net-worth taxpayers in federal tax controversies. If you need to know more about the options that are available for resolving substantial tax debts with the IRS, we invite you to get in touch. To schedule a confidential consultation with Mr. Thorn, please call 617-692-2989 or contact us confidentially online today.