Nearly 1,000 millionaires haven't filed tax returns

[Patrick Michael]

From Accounting Today (https://www.accountingtoday.com/news/nearly-1-000-millionaires-havent-filed-tax-returns?utm_source=newsletter&utm_medium=email&utm_campaign=V3_ACT_Daily_2023%2B'-'%2B09292023&bt_ee=fMQ78G8x0gMlOszDL6tIXguYXicXpBsOOKz85EP29RhzrWYKXQsNoj1cFfCpLDXp&bt_ts=1695989439817)

"Close to 1,000 taxpayers who earn over $1 million a year failed to file tax returns over multiple recent years, potentially owing $34 billion in taxes, according to data from the Internal Revenue Service. 

Senate Finance Committee chairman Ron Wyden, D-Oregon, revealed the data in a letter Thursday to IRS Commissioner Daniel Werfel, and urged the IRS to step up its enforcement efforts against wealthy taxpayers. Werfel announced efforts earlier this month to do that by focusing more of its audits on high-income taxpayers, large partnerships and big corporations. 

According to IRS data, the top 500 high-income individuals who still have not filed returns for each year from 2017 to 2020 owed $923 million and yet were unlikely to face serious consequences. However, only two of those 2,000 individuals were under active criminal investigation by the IRS and only 58 have been subjected to financial penalties such as liens or levies. 

The data showed that over 1.4 million wealthy tax cheats had still not filed required tax returns for tax years 2017 to 2020 and the total amount of unpaid taxes potentially owed by this population amounted to $65.7 billion.

"Many of these high-income nonfilers are repeat offenders," said Wyden. "According to IRS data, 10,272 taxpayers still had multiple years of unfiled returns and six figure balances of unpaid taxes going back to 2017–2020. In fact, nearly 1,000 taxpayers making more than $1 million per year have failed to file tax returns over multiple recent years."

Due to resource constraints and prosecutorial discretion, he noted most of the cases never get referred to the Department of Justice for criminal prosecution. Of the 10, 272 repeat offenders, only 154 have ever been under criminal investigation, and only 31 were in active criminal investigation this year. "

Another reason why the average taxpayer has little confidence in the IRS.  They send my clients,  many who are retired and living on fixed incomes, letters threatening to place levies and liens on their assets over a $500 tax bill, yet these cheats get away with owing millions.  Imagine what the return on investment would be if they hired more investigators and prosecutors to go after these tax cheats.

[Lee B]

Yes they have been going after the low hanging fruit because it's easy picking.

The average taxpayer can't afford or usually doesn't retain competent representation.

Going after the wealthy tax cheats requires experienced IRS Agents.

The wealthy make political contributions and have some clout with our elected representatives.

That's not the way it's supposed to work, but the wealthy have power and the average taxpayer doesn't.

[Medlin Software, Dennis]

49 minutes ago, cbslee said:

Yes they have been going after the low hanging fruit because it's easy picking.

Common sense, or dollar sense at play.  Like an old textbook said, those that spend hours finding a one cent issue may be good, but they are fired.  Anything which takes more than automation likely has some sort of review and profitability calculation.  We even talk about it here, as long as the result is close, file as is...