ASK THE CALIFORNIA EMPLOYMENT TAX AND PAYROLL TAX ATTORNEY – THE IRS COLLECTS A BUNDLE FROM HIGH-INCOME HIGH-WEALTH TAXPAYERS – BUT IT’S NOT ENOUGH

By Robert S. Schriebman

2024

Introduction

The IRS recently announced that it has recovered $172 million from 21,000 wealthy taxpayers who have not filed returns since 2017.  While this is an impressive effort the so-called “tax gap” is over $600 billion.  The IRS intends to pursue 125,000 high-income, high-wealth taxpayers who have neglected to file their returns since 2017.  The year 2017 appears to be a benchmark for the IRS but we do not know how many of these targeted individuals have not filed returns from before 2017.  These targeted people have received income between $400,000 and $1 million or greater but refuse to file their tax returns.  While millions of hard-working Americans dutifully file their returns and pay their taxes, the super-rich seem to be thumbing their nose at the IRS.

The collection initiative is due mainly to The Inflation Reduction Act funding. The IRS received a substantial amount of money in 2023 to pursue these high-income, high-wealth individuals by assigning dozens of senior employees to their cases.  The work is concentrated on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt.  In 2023, the IRS successfully collected $38 million for more than 175 wealthy individuals.  In the Fall of 2023, the IRS targeted 1600 additional wealthy non-filers.  Nearly 80% of these 1600 millionaires with delinquent tax debt, have now made payments leading to over $1.1 billion recovered.

Conclusion

Collecting over $1.1 billion is an excellent effort, but when you consider the multi-billion-dollar costs of just one modern aircraft carrier, it’s a drop in a large bucket.  Let’s hope that the IRS can collect the rest of the money to complete the aircraft carrier’s construction.

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Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 50 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.  Mr. Schriebman is in private practice.  He is not affiliated in any way with the EDD, and he is not employed by the EDD or any other agency of the State of California.

Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.

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