WASHINGTON D.C, USA — The Internal Revenue Service, IRS, is putting wealthy tax evaders on notice.
On Friday, September 8, 2023, IRS Commissioner Daniel Werfel announced a major initiative to collect hundreds of millions of dollars in past-due taxes from 1,600 millionaires and 75 large business partnerships.
Utilizing a windfall of federal funding and new artificial intelligence tools, the IRS seeks to root out affluent individuals and corporations who have been “cutting corners” on their taxes.
“This is about ensuring equity in our tax system,” Werfel said in a call with reporters. “If you pay your taxes on time, it should be particularly frustrating when you see that wealthy filers are not. It’s time to level the playing field.”
According to Werfel, each millionaire on the IRS’s radar owes at least $250,000 in back taxes, while the large business partnerships targeted have assets averaging around $10 billion.
The IRS’s new arsenal includes advanced AI research tools developed in-house by contractors.
These tools, Werfel said, are already showing promising results.
“We can now see patterns and trends previously invisible to us, allowing for more targeted compliance efforts,” he noted.
The move comes as President Joe Biden’s administration seeks to demonstrate the impact of increased federal funding for the IRS, even as Republicans in Congress aim to claw back some of that money.
In July, the IRS reported it had collected $38 million in delinquent taxes from over 175 high-income taxpayers within just a few months.
“With new funding, the IRS will have dozens of revenue officers focused on these high-end collection cases in fiscal year 2024,” Werfel said.
The aggressive stance against wealthy tax evaders was welcomed by Senate Finance Committee Chair Ron Wyden, D-Ore., who called it a “big deal.”
“This action goes to the heart of Democrats’ effort to ensure the wealthiest are paying their fair share,” Wyden said in a statement.
However, not everyone is on board with the IRS’s plan.
Grover Norquist, president of the conservative Americans for Tax Reform, warned that the new capabilities could be misused.
“This power and these resources allow them to go after anyone they want,” Norquist said. “The next step could be targeting anyone they wish for political purposes.”
David Williams of the right-leaning Taxpayers Protection Alliance shared similar concerns.
“Every business and every person should pay their taxes—full stop,” he said. “But, we should tread carefully on expanding the IRS’s reach.”
The IRS’s beefed-up enforcement abilities stem from the Inflation Reduction Act, which President Biden signed in August 2022.
Although the law allocated an $80 billion boost to the IRS, that funding remains under threat.
House Republicans have already passed a package that includes a $1.4 billion reduction to the IRS’s budget, and more cuts could be on the way amidst ongoing budget disputes.
As the federal government grapples with these budgetary and political challenges, the IRS appears committed to progressing with its compliance efforts.
“We have more hiring to do,” Werfel said. “It’s going to be a very busy fall for us.”
