Treasury Recovers $1.3 Billion in Unpaid Taxes from Wealthy Tax Dodgers

The IRS has reported a significant achievement in its tax collection efforts, recovering $1.3 billion from wealthy tax evaders since the last fall. This success has been attributed to increased spending on enforcement measures stemming from President Joe Biden’s comprehensive climate, health care, and tax legislation, which was enacted in 2022.

On a visit to Austin, Texas, Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel highlighted the progress made in the IRS’s collection strategies. Their visit coincides with growing Republican concerns about potential budget cuts to the agency if they regain control of the presidency and Congress.

In her address, Yellen underscored a troubling statistic from 2019, noting that the top one percent of wealthy Americans were responsible for more than 20% of unpaid taxes. She stated, “This unfair burden has primarily impacted ordinary Americans.”

To address these disparities, Yellen emphasized the reallocation of IRS funding toward initiatives that target tax evasion, particularly among high-income individuals. The agency’s efforts in 2023 and 2024 have mainly focused on those with an income exceeding $1 million and tax debts surpassing $250,000.

Since the launch of these initiatives, IRS data shows that nearly 80% of the 1,600 millionaires targeted for delinquent tax payments have complied and made payments, resulting in the recovery of over $1.1 billion. Furthermore, during the first half of a new initiative started in February 2024, the IRS successfully collected $172 million from approximately 21,000 wealthy individuals who had not filed tax returns since 2017.

The efforts to enforce tax compliance have faced criticism from Republican lawmakers, who have advocated for cuts to the IRS budget. They argue against the agency’s expanded powers, with Donald Trump’s presidential campaign promising drastic reductions in federal agency spending. Trump’s campaign claims that Democratic nominee Kamala Harris played a crucial role in approving funding for 87,000 new IRS agents aimed at scrutinizing taxpayers.

In addition to its enforcement measures, the IRS has also focused on modernization. This year, the agency debuted a program called Direct File, which enables individuals with straightforward W-2 forms to directly calculate and submit their tax returns to the IRS. In April, the IRS reported that those utilizing the Direct File program claimed over $90 million in refunds.

This initiative began with 12 participating states during the 2024 tax filing season and has grown to include additional states for the 2025 season. New states joining the Direct File program include Maryland, Oregon, New Jersey, Pennsylvania, New Mexico, Connecticut, North Carolina, Wisconsin, and Maine.

As the IRS continues to enhance its capabilities and strategies, it remains to be seen how future budget proposals will impact its operations and efforts to ensure that high-income individuals pay their fair share of taxes.