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Government
Treasury IG: 879,000 High-Income Earners Didn’t File Tax Returns
2020-06-03
According to the Treasury Dept. IG.

Note: this not saying they filed but used legal methods to reduce or eliminate their taxes owed. It says they skipped filing altogether. The full IG report is included at the end of the article.
[LidBlog] Liberals are almost right when they say the rich don’t pay their fair share of taxes. Truth is, SOME of the rich didn’t pay their fair share of taxes—because they didn’t file tax returns. A report by the Treasury Dept. inspector general reveals that from fiscal years 2014 through 2016, about 879,000 high-income Americans did not file taxes, and the IRS didn’t even go after them for their aggregate taxes due of $45.7 billion. High-income nonfilers.

The report breaks down the 879K as follows (the bullet points were taken from the report embedded below):

  • The IRS did not work 369,180 high-income nonfilers, with an estimated tax due of $20.8 billion. Of the 369,180 high-income nonfilers, 326,579 were not placed in inventory to be selected for work, and 42,601 were closed out of the inventory without ever being worked.

  • In addition, the remaining 510,235 high-income nonfilers, totaling estimated tax due of $24.9 billion, are sitting in one of the Collection function’s inventory streams and will likely not be pursued as resources decline.

  • The IRS removed high-income nonfiler cases from inventory, resulting in 37,217 cases totaling $3.2 billion in estimated tax dollars

The IG seems to scold the IRS at the very beginning of the report:

  • The intentional failure to file Federal tax returns is a crime. Nonfiling of tax returns can also be subject to civil fraud penalties.2 In the past, the Internal Revenue Service (IRS) has focused on the tax compliance of high-income individuals because their noncompliance can have a significant corrosive effect on tax administration. Intentional nonfiling of tax returns by those with significant financial resources and sophistication is a brazen form of noncompliance.

  • According to IRS procedures, high-income nonfiler cases present a high compliance risk; therefore, these should typically be selected for review and issued a notice. Pursuing nonfilers is one of the IRS’s most efficient enforcement strategies because issuing nonfiler notices can be a cost-effective tool that requires little more than automated notices. Previous IRS research studies from decades ago noted that at that time, the IRS pursued most nonfiler leads. However, with some exceptions, that no longer appears to be the case.

  • The top 100 highest-earning nonfiling individuals in each of the three years collectively owe $10 billion. In 99 of those 300 cases, the IRS did not even place the case into the investigation inventory and 44 were closed without any effort to work them. The remaining 157 cases were technically in the queue, but IRS conceded it was unlikely to work them due to a decline in available resources.
Posted by:3dc

#7  Al Sharpton?
Posted by: gorb   2020-06-03 22:01  

#6  2014 to 2016 so I assume it was when Lois Lerner was working so hard on the Tea Party.
Posted by: Abu Uluque   2020-06-03 12:51  

#5  If you owe the IRS millions they usually settle for pennies on the dollar.

Offers in compromise are, generally speaking, difficult to get the IRS to consent to. The two stated criteria for relief are doubt as to liability and doubt as to collectability. In this case there is a third criteria - the ability for them to use high priced lawyers / CPA's to 'create' a suitable condition for relief. Also - OIC lawyers (like my tax lawyer colleague, Matt M.) can do this simply by knowing and being familiar with OIC staff (i.e., cut deals). I don't know how prevalent that last part is but we're pretty sure it happens.
Posted by: Raj   2020-06-03 10:47  

#4  Only the ones who have made political contributions to the "wrong" side will get any attention.
Posted by: M. Murcek   2020-06-03 09:20  

#3  It is most likely the same people year over year. It is tough to give up that extra 30-40 percent each year. Additionally if you owe the IRS a few thousand they want it all plus penalties. If you owe the IRS millions they usually settle for pennies on the dollar. So if you are going to cheat, cheat big!
Posted by: Airandee   2020-06-03 06:31  

#2  and will likely not be pursued as resources decline.

Sure as hell not through a reduction in forcer - still around 80,000 last I checked, all of them still getting paid as they still refuse to take my phone calls.

The only thing they have going for them here - no tax return means the statute of limitations hasn't run let. Jeez - it's not difficult to go get this money.

The sadder (but not surprising) part of this - the utter lack of interest by IRS employees. I'd give up my practice for 5% commission and turn me loose for five years; I could retire a multi-millionaire in about two years.
Posted by: Raj   2020-06-03 00:37  

#1  The IRS did not work 369,180 high-income nonfilers, with an estimated tax due of $20.8 billion. Of the 369,180 high-income nonfilers, 326,579 were not placed in inventory to be selected for work, and 42,601 were closed out of the inventory without ever being worked.

But it's so haaard.

As per usual, the organs will only go after the easiest targets.
Posted by: charger   2020-06-03 00:16  

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