Feds set sites on taxpayers who earn more than $100,000

| Mar 2, 2021 | Criminal Tax Issues, Tax Audits

The Internal Revenue Service (IRS) recently announced that, as of 2020, it would prioritize high-income non-filers for additional review. The agency appears to be putting its money where its mouth is, shifting funds to resources that focus on aggressively pursuing investigations of these high-income taxpayers.

What does the IRS classify as a “high-income” tax filer?

When we think of a high-income earner, we may think of Bill Gates, Jeff Bezos and other multi-millionaires. However, the range viewed as “high-income” by the IRS may come as a surprise. According to recent analysis by Forbes, for its latest efforts the feds are classifying any taxpayer that earns at or above $100,000 as a “high-income” tax filer.

How is the IRS targeting these taxpayers?

The agency has a number of tools that help it focus its efforts in on high-income filers. It is likely making use of software to sift through massive amounts of data to look for those who have failed to file their returns. Eric Hylton, IRS Commissioner of the Small Business/Self-Employed Division, has stated that there is a misconception amongst taxpayers that by failing to file their returns they will remain off the agency’s radar.

This is not the case.

The IRS has numerous tools to find taxpayers. These tools help the agency — even when looking for those who do not file and presumably lack a paper trail with the feds.

What should I do if I am concerned my taxes are not up to date?

There are options to come into compliance and proactive steps can help to reduce the risk or severity of penalties. This is important, because if the feds can establish you intentionally avoided your tax bills you could face allegations of criminal wrongdoing and potential imprisonment. The attorneys at Goldburd McCone are familiar with these matters, and can discuss the risks and benefits of each option.