The Internal Revenue Service (IRS) announced on Friday that they have successfully collected $1.3 billion from wealthy tax evaders since last fall. This achievement is attributed to increased enforcement efforts fueled by President Joe Biden’s landmark legislation on climate, healthcare, and taxes enacted in 2022.
Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel visited an IRS facility in Austin, Texas, to disclose this significant milestone in tax collections. Yellen highlighted in her speech that in 2019, the top one percent of affluent Americans were accountable for over a fifth of all unpaid taxes, shifting the burden onto ordinary taxpayers.
Yellen emphasized the importance of directing IRS funding towards combatting tax evasion to address this imbalance. In 2023 and 2024, the IRS implemented multiple initiatives targeting high-net-worth individuals with outstanding tax debts, focusing on those with incomes exceeding $1 million and tax debts exceeding $250,000.
Since the initiation of these enforcement programs, nearly 80% of the 1,600 targeted millionaires have settled their delinquent tax debts, resulting in the recovery of over $1.1 billion. A new initiative launched in February 2024 led to the collection of $172 million from 21,000 wealthy individuals who had not filed tax returns since 2017.
Meanwhile, Republicans have called for reductions in IRS funding. Donald Trump’s presidential campaign proposed significant cuts to federal agency spending, with criticism directed at Democratic nominee Kamala Harris for supporting the hiring of 87,000 new IRS agents.
In an effort to streamline processes, the IRS introduced the Direct File program in 2024, enabling individuals with straightforward W-2 forms to calculate and submit their returns directly to the IRS. Participants in the program claimed over $90 million in refunds as of April.
Initially available in 12 states during the 2024 tax season, the program has expanded to include more states for the 2025 tax season, such as Maryland, Oregon, New Jersey, Pennsylvania, New Mexico, Connecticut, North Carolina, Wisconsin, and Maine.