The IRS has recently reported that it has successfully recovered $160 million from over 175 high net worth individuals. This move is part of the agency’s broader efforts to close the estimated $688 billion gap between taxes owed and taxes collected during the 2021 tax year. With the help of $60 billion in funding from the Inflation Reduction Act, the IRS aims to bring those who owe taxes to justice.
Some of the funds recouped so far were obtained through restitution in criminal cases. In one instance, an individual had to pay back $15 million to the IRS after attempting to deduct personal expenses, including a lavish 51,000 square-foot mansion with various sports courts, as business expenses. Another individual pleaded guilty to falsifying tax returns and embezzling $670,000 from their business, with $502,000 of it being used for gambling.
Looking ahead, the IRS has plans to hire new accountants in 2024 to assist with auditing some of the largest tax-paying corporations. Additionally, the agency aims to incorporate artificial intelligence technologies to enhance its ability to detect tax cheating.
This crackdown by the IRS sends a strong message to high net worth individuals who may have been evading their tax obligations. The agency’s efforts, backed by substantial funding, indicate a serious commitment to closing the tax gap and ensuring that everyone pays their fair share. By holding individuals accountable for their actions, the IRS is working towards a more equitable tax system.