Catch Them if You Can
The IRS is about to embark on a grand adventure to bring a bit of fairness to the world of taxes. Armed with funds from the Inflation Reduction Act, they're setting their sights on a new target: high-income earners, partnerships, and corporations who've been playing hide-and-seek with their taxes for far too long.
This time, they're not going into battle empty-handed. They've got the big guns of technology on their side, with Artificial Intelligence helping them spot tax evasion schemes.
Specifically, the IRS is rolling out the red carpet for high-income individuals with tax troubles. In their High Wealth, High Balance Due Taxpayer Field Initiative, they're going all-in on those with total positive income above $1 million and $250,000 or more in recognized tax debt. The goal is to replicate the previous success when the IRS brought in $38 million from over 175 high rollers. Now, they're sending in the troops – dozens of Revenue Officers will be on the case in FY 2024.
But don't worry, folks earning less than $400,000 a year can breathe a sigh of relief. The IRS is making sure they don't get caught in the crossfire. In other words, those earning less than $400,000 can still be audited, but their audit rates will not increase under the new initiative.
The IRS is also turning its attention to the world of digital assets, like cryptocurrencies, and the Foreign Bank Account Report (FBAR) violations. Based on the IRS analysis of multi-year filing patterns, there are hundreds of possible FBAR non-filers with account balances that average over $1.4 million.
In the end, the IRS aims to make taxes as painless as possible for regular folks while they go after the tax evaders, or so goes the main narrative. However, words ‘painless’ and ‘taxes’ probably don’t belong to the same sentence…