The IRS says that millionaires and billionaires don’t pay their taxes, which costs the government more than $150 billion a year.
They say that people who don’t pay their taxes have caused the government debt to grow and the tax system to be “unfair.” Congress has given the IRS money, and it has used it to crack down on the richest people, partnerships, and bigger businesses. Tax Commissioner Danny Werfel said that the IRS has started a number of programs that will be used to go after people with the most complicated returns and make sure that everyone pays their fair share.
Werfel said, “Millionaires and billionaires who don’t file or underreport their income make up $150 billion of our tax gap.” Our tax gap is the difference between how much money is owed and how much is paid.
It’s also been hard for the IRS to do checks because it doesn’t have enough money, especially for more complicated returns that take more time, resources, and work to check. However, the number of taxpayers making more than $1 million has grown by 50% over the last year, while the number of audits of taxpayers making more than $1 million has dropped by 80%.
Werfel said it was hard to even figure out how much was owed for papers that were very complicated. “To be fair, we have to spend money to make sure that the IRS can figure out what’s owed to everyone, whether they are a complicated filer who can pay a lot of lawyers and accountants or a simple filer with one income who takes the standard deduction.” “That seems like a more fair system to us,” he said.
To make sure that every year’s tax season is fair and balanced, the IRS wants to build more audit tools and be able to look into more taxpayers. Already, the IRS has found that 1,600 millionaires have not paid at least $250,000 in taxes. So far, the group of millionaires has given the IRS about $480 million.
