WASHINGTON (Reuters) – The U.S. Treasury Department and the Internal Revenue Service said on Friday they have recovered $1.3 billion in unpaid taxes from wealthy individuals through new enforcement initiatives funded by $60 billion in IRS modernization spending from the climate-focused Inflation Reduction Act.
WHY IT IS IMPORTANT
Republicans in Congress have long vowed to repeal the 10-year IRS funding approved in 2022, arguing it unfairly burdens Americans with their taxes. Republican presidential candidate Donald Trump pledged Thursday to repeal all unspent funds from the Inflation Reduction Act, including billions of dollars set aside for the IRS.
The IRS has planned to spend about $10.6 billion of those funds through the end of fiscal year 2024, which ends Sept. 30, leaving nearly $50 billion that could be recovered. But budget forecasters say that would increase the federal budget deficit by more than $100 billion over a decade as the agency would forgo more intensive enforcement.
IN NUMBERS:
In the first six months of its operation, a new initiative targeting 125,000 wealthy individuals who have not filed tax returns since 2017 has raised $172 million from 21,000 taxpayers who have not filed tax returns, according to the Treasury Department.
Another initiative, aimed at wealthy individuals with incomes of more than $1 million and $250,000 in unpaid, recognized tax debts, has generated $1.1 billion for the Treasury.
IMPORTANT QUOTES
According to US Treasury Secretary Janet Yellen, the number of audits of millionaires has dropped by 80% due to cuts at the IRS.
“During the previous (Trump) administration, as audit rates of high-income taxpayers declined, the share of audits of taxpayers with incomes under $200,000 increased,” Yellen said in a speech scheduled to be delivered at an IRS service center in Austin, Texas. “In 2019, it was estimated that the top 1 percent of Americans owed more than one-fifth of unpaid taxes, leaving ordinary Americans to bear the burden.”
(Reporting by David Lawder; Editing by Alex Richardson)
