The Department of the Treasury said on Thursday that it has collected $1 billion amid an uptick in enforcing the nation's tax laws on millionaires.
The stepped-up enforcement is in response to the 2022 passage of the Inflation Reduction Act, which helped bolster the agency's staffing levels. The bill, which provided $80 billion for the IRS to strengthen its staffing, was universally opposed by congressional Republicans.
The Treasury said that dozens of employees were assigned cases to investigate millionaires who had at least $250,000 in recognized tax debt. The program started off by collecting $38 million from more than 175 high-income, high-wealth individuals a year ago. The enforcement efforts were broadened recently to include 1,600 high-income earners.
“President Biden’s Inflation Reduction Act is increasing tax fairness and ensuring that all wealthy taxpayers pay the taxes they owe, just like working families do,” said Secretary of the Treasury Janet Yellen. “A new initiative to collect overdue taxes from a small group of wealthy taxpayers is already a major success, yielding more than $1 billion in revenue so far.”
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Earlier this year, the IRS sent notices to 25,000 Americans believed to have earned over $1 million who missed a tax return between 2017 and 2021, while an additional 100,000 notices were sent to those making incomes between $400,000 and $1 million.
Of the 125,000 letters sent, some received multiple notices for missing multiple years.
Before the bump in funding, the IRS said it struggled to keep up with compliance letters and to ensure high-income earners were paying their taxes.
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Thursday's announcement comes after the IRS said earlier this year it plans to increase audits of large, complex partnerships with assets over $10 million from 0.1% in 2019 to 1% in 2026. Individuals with incomes of over $10 million will face a 16.5% chance of being audited in 2026, which is up from 11% in 2019.
Republicans have decried the legislation, especially the additional funding for the IRS. Many Republicans have accused the Biden administration of using the IRS to increase audits on middle-income taxpayers — a claim the Biden administration has pushed back on.
