IRS Collects Over $520M in Back Taxes From Millionaires

Facts

• The US Internal Revenue Service (IRS) said on Friday that it has collected more than $520M in back taxes from millionaire Americans over the past year.¹
• The IRS credited the Inflation Reduction Act for helping it speed up efforts to scrutinize large corporations, high-income individuals, and complex partnerships not paying taxes.²
• The Inflation Reduction Act, approved in 2022, earmarked $80B over 10 years to assist the IRS in speeding up its tax enforcement capabilities. However, $20B was rescinded in budget cuts in 2023 as part of a deal to prevent a debt ceiling crisis.³
• Since mid-2022, the IRS has collected more than half a billion dollars in tax revenue from about 1.6K households with $1M or more in income and over $250K in tax debt.⁴
• The IRS said it's also focused on 76 of the US' largest partnerships with more than $10B in assets, including hedge funds, large law firms, and real estate investment partnerships.⁵
• Previously, the Biden administration had pledged not to raise tax audit rates for individuals and households earning less than $400K annually.⁶

Sources: ¹NBC, ²UPI, ³ABC News, ⁴Huffington Post, ⁵Yahoo Finance and ⁶Washington Post.

Narratives

• Democratic narrative, as provided by IRS. The IRS is doing a phenomenal job of reversing the historically low audit rates and ensuring that the ultra-rich pay what is legally owed under federal law. The funding has allowed the IRS to target wealthy tax dodgers, ensuring it recaptures hundreds of billions of dollars in revenue, which can then be reinvested into the country.
• Republican narrative, as provided by Washington Examiner. The federal government is facing an economic crisis, and budget cuts are needed across the board. Exorbitant funding of the IRS doesn't have the impact that Democrats think it does, and targets the middle class more than the ultra-rich. Rather than using the funds to address the plethora of mismanagement issues within the department, the beefed-up IRS has wasted it on a reckless number of new auditors.

Predictions