Update on High Asset Tax Collection and IRS Digital First Campaign

The budget increase provided by the Inflation Reduction Act (IRA) to the Internal Revenue Service (IRS) continues to pay off. IRS Commissioner Danny Werfel and Treasury Secretary Janet Yellen recently provided an update on ongoing collection and technology initiatives.

Collection of tax debt and deterring tax fraud by high-wealth taxpayers remains a priority

One year ago, the IRS initiated its program to investigate high-income taxpayers who had outstanding tax debt. IRS specialists targeted high-wealth earners with income of at least $1 million and recognized tax debt of more than $250,000.00. Given its prior underfunding, the IRS simply lacked the staff and resources to collect this outstanding debt. With the budget boost from the IRA, the agency is able to act on its long-planned initiative and netted $38 million from 175 taxpayers.

Following this successful measure, the IRS has identified additional high-wealth candidates with outstanding tax debt. Of these, approximately 80 percent of taxpayers with past-due tax debt have made payments of more than $1.1 billion to the IRS as of September 2024.

While tax collection from high-wealth earners garners headlines, the promotion of the IRS “Digital First” Initiative aims to restore the ability of the agency to serve U.S. taxpayers as it streamlines processes and retires decades-old technology.

Digital First Initiative aims at improving client experience and satisfaction

Taking a deep dive into the modes by which it communicates and serves the tax-paying public, the IRS has made significant strides in offering clients a paper-free experience and rapid information service. The IRS notes it has “launched more digital tools in the last two years than the previous 20 years.” While not a track record that others would be terribly proud of, it does show considerable recent progress by the IRS.

Some of these new tools and services include:

• New features and improvements to individual and tax professional online accounts, development and launch of a Business Tax Account feature. The account allows qualified users of specified types of entities and businesses to manage business tax information, make payments, read notices, and review tax records.
• A mobile “Where’s My Refund” tool for taxpayers to track the status of their tax refund. Also, the IRS has developed and released 30 additional mobile digital tax forms.
• Deployment of Direct File, a newly developed IRS tool that enables taxpayers to file their tax return online with the IRS for no charge.

These and other digital tax tool enhancements are important to improve the taxpayer experience. With greater transparency comes greater agility for taxpayers to understand their tax obligations—and exercise their right to dispute assessments and penalties when they disagree with the IRS. 

Concerned about business compliance, tax litigation or an employment tax dispute?  Speak with our tax group today.

With offices in Cleveland and Chicago, the legal group at Robert J. Fedor, Esq., LLC delivers skilled representation on criminal tax investigations, compliance issues, and matters involving foreign bank accounts. Call 440-250-9709 or contact us online today.