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IRS Fails To Pursue High-Income Nonfilers Who Owe $46 Billion In Back Taxes, Watchdog Says

June 2, 2020 / Ashlea Ebeling, Senior Contributor

The Internal Revenue Service watchdog TIGTA says the IRS is ignoring hundreds of thousands of delinquent high-income taxpayers who owe billions of dollars in total. That’s sobering news as millions of Americans still are gathering documents to file their 2019 tax returns by the July 15, 2020 deadline—pushed back from the normal April 15 deadline because of Covid-19. The American tax system is voluntary: You file an annual return and pay your share. Most taxpayers (84%) pay their taxes in full and on time.

However, the Treasury Inspector General For Tax Administration identified 879,415 high-income nonfilers for tax years 2014 through 2016 with an estimated tax due of $45.7 billion. The top 100 high-income nonfilers during that time period that the IRS did not address or resolve had estimated taxes due totaling $9.9 billion. TIGTA says that the IRS failed to send out delinquency notices and shelved cases, missing the opportunity to bring these taxpayers back into compliance at a huge cost to the Treasury.

Here’s the damning evidence from the TIGTA report, High-Income Nonfilers Owing Billions Of Dollars Are Not Being Worked By The Internal Revenue Service:

The IRS did not work 369,180 high-income nonfilers, with 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 that will not likely be worked by the IRS.

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Chris J. Stewart

Chris currently serves as Chief Executive Officer of Surgio Health as well as Chief Operating Officer at Ortho Spine Partners. Prior to that, he was the assistant vice president and business unit leader of Medical Device Management for HealthTrust Purchasing Group (HPG).

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