NATIONAL NEWS

IRS collects milestone $1 billion in back taxes from high-wealth taxpayers

Jul 11, 2024, 2:09 AM

FILE - A sign for the Internal Revenue Service building in Washington, May 4, 2021. The IRS plans t...

FILE - A sign for the Internal Revenue Service building in Washington, May 4, 2021. The IRS plans to end another major tax loophole that could raise more than $50 billion in revenue over the next decade, the U.S Treasury says.(AP Photo/Patrick Semansky, File)
Credit: ASSOCIATED PRESS

(AP Photo/Patrick Semansky, File)

WASHINGTON (AP) — The IRS announced Thursday that it has collected $1 billion in back taxes from high-wealth tax cheats — a milestone meant to showcase how the agency is making use of the money it received as part of the Biden administration’s signature climate, health care, and tax package signed into law in 2022.

Part of the push for public awareness of high-wealth tax collections is a growing recognition by agency officials that a potential Republican takeover of the White House and Congress could mean massive future budget cuts for the IRS. Showing the public how much work the IRS is getting done is meant to give the much-maligned agency a more sympathetic image.

As part of that effort, last year the IRS launched a series of initiatives aimed at pursuing high-wealth individuals who have failed to pay their tax debts. The IRS says the campaign is focused on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt.

“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,” Treasury Secretary Janet Yellen said in a statement.

In June, the Treasury proposed a rule and guidance that includes plans to essentially stop “partnership basis shifting” — a process by which a business or person can move assets among a series of related parties to avoid paying taxes. That could raise more than $50 billion in revenue over the next decade, Treasury said.

Other initiatives announced in the past year have included pursuing people and businesses that improperly deduct personal flights on corporate jets and collecting back taxes from delinquent millionaires.

Eugene Steuerle, a fellow and co-founder of the Urban-Brookings Tax Policy Center, said if the IRS “can show they’re having a positive impact and it’s not impacting average American taxpayers, there would be more public support for this activity and the agency.”

“Any increase in government investigations appears like an intrusion,” Steuerle said. He added that if the IRS can show taxpayers how it is conducting its investigations, the broader public may become less fearful of an audit.

Republicans have meanwhile threatened a series of cuts to the IRS, sometimes successfully.

House Republicans built a $1.4 billion reduction to the IRS into the debt ceiling and budget cuts package passed by Congress in the summer of 2023. The deal included a separate agreement to take $20 billion from the IRS over the next two years and divert that money to other non-defense programs.

House Republicans’ fiscal year 2025 proposal out of the Financial Services and General Government Subcommittee in June proposes further cuts to the IRS in 2025, and would cut funding to the Direct File program that is being expanded to allow Americans to file their taxes directly with the IRS.

Demian Brady, vice president of research for the National Taxpayers Union Foundation — says the IRS still targets non-high-wealth partnerships for audits.

“It should also be noted that nearly two-thirds of audits initiated in 2023 were on those making less than $200,000,” Brady said.

National News

FILE - Supporters of President Donald Trump try to break through a police barrier, Jan. 6, 2021, du...

Associated Press

Wisconsin man charged with fleeing to Ireland to avoid prison term for Capitol riot role

A Wisconsin man fled to Ireland and sought asylum to avoid a prison sentence for joining a mob’s attack on the U.S. Capitol over three years ago, federal authorities allege in a court filing Tuesday. The filing charges Paul Kovacik with defying a court order to surrender and serve three months behind bars for participating […]

25 minutes ago

Temarkus Washington, who says the sexual abuse he experienced as a teenager at a troubled Chicago j...

Associated Press

Survivors sue Illinois over decades of sexual abuse at Chicago youth detention center

CHICAGO (AP) — Temarkus Washington says the sexual abuse he experienced as a teenager at a troubled Chicago youth detention center still gives him nightmares. The 35-year-old spoke publicly about his experiences Tuesday, a day after joining two lawsuits collecting dozens of abuse allegations at the Cook County Juvenile Temporary Detention Center, one of the […]

26 minutes ago

FILE - A passer-by walks through a portion of the Cass Recreational Complex which has been turned i...

Associated Press

Massachusetts issues tighter restrictions on access to homeless shelter system

BOSTON (AP) — Massachusetts Gov. Maura Healey unveiled new restrictions on the state’s homeless family shelter programs Tuesday. Beginning Aug. 1, families who aren’t prioritized for placement in emergency assistance shelters will be eligible to stay at overflow sites for just five days. Healey said she was tightening restrictions on emergency assistance system eligibility because […]

41 minutes ago

FILE - Steve Bannon speaks outside Danbury Federal Correctional Institution, July 1, 2024, in Danbu...

Associated Press

Steve Bannon’s trial in border wall fundraising case set for December, after his ongoing prison term

While Steve Bannon serves a four-month federal prison term, the conservative strategist now has a December date for a different trial in New York, where he’s charged with scheming to con donors who gave money to build a border wall with Mexico. With Bannon excused from court because of his incarceration, a judge Tuesday scheduled […]

42 minutes ago

Dane County Boys and Girls Club President Michael Johnson, left, looks on as workers install a stat...

Associated Press

Wisconsin, in a first, to unveil a Black woman’s statue in its Capitol

MADISON, Wis. (AP) — About 1,000 people are expected at a gala event this weekend as Wisconsin finally honors a person of color with a statue at its state Capitol. Workers lowered the shrouded statue of Wisconsin Secretary of State Vel Phillips into position Tuesday, and then encased it in a crate ahead of Saturday’s […]

53 minutes ago

Vice President Kamala Harris boards Air Force Two, Monday, July 22, 2024 at Andrews Air Force Base,...

Associated Press

Democratic delegates cite new energy while rallying behind Kamala Harris for president

After weeks of intraparty division over President Joe Biden’s candidacy, delegates to the upcoming Democratic National Convention on Tuesday rallied rapidly and enthusiastically behind Vice President Kamala Harris as their party’s new presidential candidate. Suddenly, some delegates said, they have a lot more to look forward to at their national meeting in Chicago. “Before it […]

1 hour ago

IRS collects milestone $1 billion in back taxes from high-wealth taxpayers