IRS Targets Rich Tax Dodgers Using New Funds, Chief Werfel Says

The IRS is taking “swift and aggressive action” to strengthen enforcement efforts against high-income individuals as it starts to use the funding it received in the tax-and-climate law, IRS Commissioner Danny Werfel said.

Recent enforcement efforts include closing about 175 delinquent tax cases for millionaires yielding $38 million, and intensifying work to crack down on millionaires who don’t file tax returns. The agency has also identified about 100 high-income people claiming benefits in Puerto Rico without meeting certain requirements, with many of those cases expected to be taken up by the Criminal Investigation division, and is escalating enforcement efforts around Malta pension plan transactions, Werfel said.

The agency plans to use tax-and-climate law funds to go after more millionaires who are delinquent on taxes and aggressively pursue taxpayers using abusive tax schemes, Werfel said.

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“The IRS of today is laser-focused on holding our highest wealth filers, millionaires and billionaires, accountable for what they owe,” Werfel said Thursday on a call with reporters, the first in a series of quarterly press calls that Treasury and the IRS plan to hold on implementation of the tax-and-climate law funds.

The IRS received $80 billion in the law, which could be slashed to about $60 billion under a debt-limit agreement between the White House and congressional Republicans.

Werfel also spoke about some agency efforts to improve taxpayer services. The IRS has opened or reopened 35 permanent taxpayer assistance centers where people can meet with IRS employees in-person, and is holding a series of events where the IRS will set up temporary in-person centers in locations far from the permanent sites. It’s also working to expand its ability for taxpayers to interact with the agency online, and plans to make business accounts available for sole proprietors by the end of the fiscal year, Werfel said.

The agency is replacing decades-old mail-sorting machines at its processing centers in Austin, Texas, Kansas City, Mo., and Ogden, Utah. The agency is also working to scan more paper-filed tax forms, and so far has scanned 38,000 individual income tax return 1040 forms as well as hundreds of thousands of other forms, Werfel said.

The press call comes as House Republicans are pursuing cuts to the IRS’s annual appropriations, on top of clawing back funds tied to the tax-and-climate law as part of the debt-limit deal. Werfel warned against the cuts, saying they would hurt the agency’s enforcement and customer-service efforts.

“I know that as we enter upcoming budget negotiations, there’s an interest in scaling back IRS resources. I hope that we can make the case to Congress and the American people that we are putting our resources to work for them,” Werfel said.