Making Millionaires Pay Their Fair Share: October 2023 Update

The IRS, given new impetus by the Biden administration directive to pursue high-income tax cheats and fortified by funding from the Inflation Reduction Act, is already collecting hundreds of millions from wealthy tax evaders.

[MarketWatch] “A month after announcing it would crack down on 1,600 millionaires who were far behind on their taxes, the Internal Revenue Service said Friday it has collected $122 million from 100 of these cases.

“That’s on top of $38 million in back taxes the IRS has already collected from 175 millionaires. It brings the recent rake of back taxes from rich households to $160 million, IRS Commissioner Danny Werfel said.”

That’s just the beginning. The IRS estimates that there was a “$688 billion gap between the amount of taxes owed and the amount of taxes actually paid during tax year 2021.” [MarketWatch]

When millionaires and billionaires and big corporations don’t pay their taxes, that leaves the rest of us footing the bill. For decades, Congress has starved IRS enforcement of funds to do its job. That meant the IRS could only afford to audit smaller taxpayers, with less complicated returns that are easier and cheaper to review. They didn’t have the money to go after millionaires and billionaires and big corporations protected by layers of accountants and law firms. Sometimes, those fat cats hide income behind complex corporate structures and schemes.Sometimes, they just don’t pay, counting on scaring off IRS enforcement with the threat of lengthy and expensive legal battles.

It’s a new day, as long as Republicans in Congress do not succeed in again hobbling the IRS by cutting funding, or shutting down the government.

For a full discussion, see:

Making Millionaires Pay Their Fair Share, Part I

and

Making Millionaires Pay Their Fair Share, Part 2