Enforcing High-Income Taxpayer Compliance is a Priority for the IRS

While the Internal Revenue Service (IRS) has several enforcement priorities, it has recently made clear that one of its top priorities is ensuring compliance among high-income and high-wealth taxpayers. With additional funding under the Inflation Reduction Act, the IRS is able to pursue enforcement initiatives that it was unable to pursue previously, and these initiatives have led to the recovery of $1.3 billion from these taxpayers in the 12 months alone. Learn more from New Jersey tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

Two Ongoing IRS Enforcement Initiatives Target High-Income and High-Wealth Taxpayers

The IRS discussed its ongoing efforts to target high-income and high-wealth taxpayers in a September 6, 2024 News Release. As stated in the News Release, the IRS is currently pursuing two enforcement initiatives specifically focused on high-income and high-wealth taxpayer compliance.

The first of these initiatives, launched in the fall of 2023, is targeting taxpayers with more than $1 million in income and $250,000 in recognized tax debt. According to the IRS’s News Release, the agency “was previously unable to collect from these individuals due to a lack of resources.” Over the past year, however, the IRS reports that nearly 80 percent of taxpayers in this category have made payments, resulting in approximately $1.1 billion recovered.

Launched in February of this year, the IRS’ second initiative targets taxpayers who have not filed tax returns since 2017 and who are believed to have more than $400,000 in income based on third-party filings. According to the IRS’ News Release, nearly 21,000 taxpayers in this category (out of an estimated 125,000) have filed, resulting in an additional $172 million recovered.

Options for Noncompliant High-Income and High-Wealth Taxpayers

Given that these initiatives are ongoing, what should high-income and high-wealth taxpayers do if they have concerns about compliance? The short answer is, “It depends.” While there are several options for resolving (and settling) substantial tax debts with the IRS, the specific options that are available in any particular case depend on the specific circumstances involved. With this in mind, some examples of potential options in these cases include things like:

• Filing a delinquent or amended return
• Submitting a streamlined filing
• Submitting a voluntary disclosure
• Seeking a settlement or installment agreement
• Submitting an offer in compromise

In all cases, however, a proactive approach is best. Once the IRS initiates an audit or investigation, the options that are available become more limited. With this in mind, if you have compliance-related concerns and believe that you could be a target for the IRS, we strongly recommend speaking with an experienced New Jersey tax lawyer as soon as possible.

Request a Consultation with New Jersey Tax Lawyer Kevin E. Thorn

If you need to know more about the options that are available for resolving substantial tax debts with the IRS, we invite you to get in touch. To request a consultation with New Jersey tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, please call 201-842-7696 or contact us confidentially online today.