The Treasure Inspector General for Tax Administration reports that the government has failed to collect over $37 billion in taxes from high-income non-filers. With numbers this high it is no surprise the Internal Revenue Service (IRS) is taking the issue seriously. In 2020 the agency announced a new program that focuses specifically on this group of non-filers.
Who does the IRS consider a high-income non-filer?
The IRS qualifies any taxpayer who earns $100,000 or more annually as a high-income taxpayer for these purposes.
How does the IRS find non-filers?
The IRS relies heavily on third-party information to find non-filers. Other avenues that result in information about non-filers include data analytics, the whistleblower program, investigations by other law enforcement agencies, and information from other institutions because of tax treaty agreements.
How is the IRS cracking down on those who earn $100,000 or more?
The agency has implemented the following tactics to focus in on this group of taxpayers:
- Moved resources. The IRS has shifted how it allocates resources to the identification and prioritization of finding non-filers.
- Communicated efforts. The IRS also stated that it sent out communications to taxpayers who qualified as high-earning non-filers to notify them of their obligations.
- Completed in-person visits. Revenue officers also visited taxpayers who fit this definition in-person in what the agency called High-Income Delinquent Filer Sweeps.
- Automated returns. The agency also began filing Automated Substitute for Returns. This means the agency can file returns on behalf of the alleged offenders and then send the taxpayer notification of potential liability.
- Criminal investigations. In some cases, the error can rise to the level of tax fraud. As such, the IRS has stated that the Office of Fraud Enforcement will review these high-income non-filer cases and refer some to the IRS Criminal Investigation Division.
Those who received notification from the IRS or are concerned that their tax filings are not in line with applicable tax law are wise to take the matter seriously. The attorneys at Goldburd McCone are experienced with these issues and can discuss your options.