IRS hauls more than $1B in back taxes from ultra-high earners

investmentnews.com:

The tax man has come for a lot of rich Americans.

The IRS has announced it has successfully collected $1 billion in overdue taxes from wealthy individuals since 2023, a haul that came as part of an initiative targeting high-income earners who have evaded paying their tax obligations.

In a statement Thursday, the federal tax agency said it focused on approximately 1,600 individuals, each with incomes of at least $1 million and recognized tax debts exceeding $250,000.

“With this collection activity, the IRS passed an important milestone in our effort to improve compliance and ensure fairness in the tax system,” IRS Commissioner Danny Werfel said.

This initiative stands out due to its significant return on investment. According to calculations by Forbes, the average tax levy from these individuals amounted to $625,000, far surpassing the average return of $54,000 adjustments typically obtained through standard audits.

“Efforts to increase tax fairness and bring in revenue from high-end taxpayers who have not paid what they owe are already paying off to the American people,” Treasury Secretary Janet Yellen said in a briefing, as per the New York Times.

The IRS cited other areas where it’s intensifying its scrutiny of various forms of tax evasion and abuse of resources. This includes the misuse of corporate jets for personal travel, audits on 76 of the largest partnerships in the US which include hedge funds and REITs, and its recent efforts to combat “abusive partnership transactions” that it said enable wealthy taxpayers to avoid paying what they owe.

In addition to the $1 billion already collected, the tax agency highlighted its recently announced effort to identify and collect tax from over 100,000 Americans in the