IRS Boosts Revenue Amid Funding Threats: $360 Million Recovered from Wealthy Tax Evaders

The IRS has announced a significant achievement, revealing the collection of an additional $360 million in overdue taxes from delinquent millionaires. 

The agency’s leadership, aiming to spotlight their modernization efforts funded by the Inflation Reduction Act, emphasized the impact of this success, especially amid looming threats of funding cuts from Republicans.

In a call with reporters, IRS leaders detailed their utilization of the funds allocated through the Democrats’ Inflation Reduction Act, signed into law in August 2022. With a total of nearly half a billion dollars reclaimed from wealthy tax cheats, this accomplishment follows a prior collection of $122 million from delinquent millionaires in October.

The positive announcement, however, coincides with the IRS preparing for potential funding cuts, particularly those agreed upon in the debt ceiling and budget cuts package passed by Congress last year. 

This package included a rescission of $20 billion from the IRS over two years, raising concerns about the agency’s ability to maintain its momentum.

IRS’s Tax Season Dynamics

IRS Commissioner Daniel Werfel addressed the impending cuts, stating that the impact of the discussed rescission would not affect their efforts until later years. 

Despite uncertainties, he affirmed the agency’s commitment to spending the allocated $60 billion over the next decade to maximize its impact on taxpayers.

Werfel expressed hope that policymakers would recognize the positive impact of the Inflation Reduction Act funding, urging a restoration of IRS funding to sustain the agency’s momentum. 

As of December, the IRS initiated 76 examinations into major US partnerships, encompassing hedge funds, real estate investment partnerships, and large law firms. 

With the 2024 tax season set to begin on January 29, the IRS faces both triumphs and challenges, showcasing the pivotal role funding plays in maintaining the agency’s effectiveness. 

The announcement underscores the importance of consistent appropriations to ensure the IRS can continue its efforts in serving taxpayers and addressing tax compliance effectively.