Rich Tax Cheats’ $66 Billion Tab Pressures IRS to Crack Down

More than 1.4 million high-income tax cheats didn’t file tax returns for 2017 to 2020, potentially racking up some $65.7 billion in unpaid taxes, according to an examination of IRS data by Senate Finance Chair Ron Wyden (D-Ore.).

The lawmaker disclosed the findings in a letter to IRS Commissioner Danny Werfel, urging the agency to step up enforcement.

The letter released Thursday includes details of the top 500 high-income individuals for each of 2017 to 2020 that hadn’t filed returns. This group that totaled 2,000 taxpayers owed $923 million, but has rarely faced criminal investigations or fines. Out of the group of 2,000, two were in active criminal investigations and 58 had received liens or levies.

More must be done to address the “egregious level” of noncompliance, Wyden wrote to Werfel. Referrals to the Justice Department for civil or criminal investigations, liens, and levies may be necessary, Wyden said.

“Over the last decade, Congressional Republicans have led the push to cut IRS resources in order to let wealthy tax cheats off the hook—and according to this data they’ve succeeded,” Wyden wrote. “Odds are, if you’re a wealthy tax cheat that doesn’t even bother to file a tax return, you’ll get away with it.”

The Democrats’ Inflation Reduction Act provided more money for the agency to bolster enforcement efforts, though the GOP has repeatedly tried to slash the funds as well as regular appropriations for the IRS. Some Republicans have expressed concern that the money would be used to audit lower-income taxpayers.

Wyden urged the IRS to go after “every single millionaire non-filer” using the tax-and-climate law money.

Nearly 1,000 taxpayers making more than $1 million a year failed to file tax returns over multiple years, the data found. Those taxpayers owe an estimated $34 million in unpaid taxes, Wyden wrote.

Out of 10,272 “repeat offenders,” 154 had been under criminal investigation and 31 were in active criminal investigation this year. For tax years 2017 to 2020, 8,729 high-income non-filers each had potentially not paid at least of $500,000 in taxes, according to the letter.