An infusion of funding for the Internal Revenue Service (IRS) has allowed the agency to recover over half a billion dollars in unpaid taxes owed by wealthy individuals over the course of the last year alone, the agency announced last week.
The agency said that, due to an effort started last fall to contact 1,600 millionaires about unpaid taxes, the agency has collected $360 million in addition to the $160 million that it had collected as of October last year. This brings the total to $520 million recovered so far from the 900 cases that have been assigned to IRS officers – part of an initiative to intensify efforts to go after wealthy tax cheats.
The taxes were recovered from taxpayers with incomes over $1 million and who held at least $250,000 in tax debt. The effort was made possible by a provision in the Democrats’ 2022 Inflation Reduction Act (IRA) that allocated additional funding for the IRS specifically to go after wealthy tax cheats, who federal officials have found are dodging over $160 billion in taxes annually. IRS officials have called for the agency funding to be maintained in order for it to continue recovering more tax debts owed by the rich.
The escalated efforts are seemingly having an “immediate impact,” IRS Commissioner Danny Werfel told reporters last week, per MarketWatch. “For this progress to continue, we must maintain a reliable, consistent annual appropriation for our agency, as well as keeping Inflation Reduction Act funding intact,” Werfel said.
Budget cuts pushed by the GOP over past decades have already severely hampered the IRS’s ability to go after wealthy tax cheats — and the recently passed funding has been the subject of relentless attacks from Republicans. Last year, House Republicans voted to revoke nearly all of that funding in one of their first bills passed under their newfound majority.
That bill stalled in the Senate, but Republicans have already succeeded in clawing back $20 billion of the $80 billion included in the IRA, as part of a deal to keep the government open last year, and made a deal recently to speed up that clawback as part of another debt ceiling deal this year. All the while, Republicans have also made misleading claims about a so-called “army” of tax agents that the funding would create – in an attempt to fearmonger over the plan.
Democrats and progressives have said that the Republicans’ efforts to rescind funding that has allowed the IRS to recover such a large amount of unpaid taxes from wealthy tax dodgers speaks to their priorities.
“We beefed up the IRS’s ability to go after ultra-rich individuals who refuse to pay taxes they owe — and they’ve been able to claw back nearly a half a billion dollars,” said Sen. Chris Van Hollen on social media. “Now Republicans are working to protect these tax cheats by trying to cut IRS funding. Tells you who they’re fighting for.”
The Congressional Progressive Caucus echoed that sentiment, saying that it is clear Republicans are motivated by the desires of their wealthy friends and benefactors. “This is why progressives fought so hard to fund the IRS in the Inflation Reduction Act — to ensure the wealthy and large corporations are paying their fair share in taxes,” the caucus wrote on social media. “When Republicans try to cut back that funding, this is who they’re trying to protect.”
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