Billionaires’ Worst Nightmare: IRS Unleashes AI To Track Down Mega Tax Debts

Last week, the IRS announced its newest effort aimed at aggressively pursuing 1600 millionaires who each owe $250,000 or more, along with 75 business partnerships with assets averaging $10 billion each, who collectively owe hundreds of millions in overdue taxes. The agency will be utilizing artificial intelligence (AI) as well as their recently hired employees and contractors to perform this task.

With the funding and resources granted through the Inflation Reduction Act in 2022, the IRS has hired tens of thousands of new employees, improved its customer service, increased their online services, and expanded its criminal investigation branch, among other changes. The use of AI to track large tax debts and delinquent taxpayers is expected to be a significant aid to the agency.

Essential E-Filing Changes Every Business Should Be Aware Of

Pursuit Of High Income Earners Who May Have Cut Corners On their Taxes

IRS Commissioner Daniel Werfel stated that the agency now has the necessary funding to pursue delinquent taxpayers and will focus on their goals with the assistance of AI. Mr. Werfel stated, “New tools are helping us see patterns and trends that we could not see before, and as a result, we have higher confidence on where to look and find where large partnerships are shielding income.”

The IRS reported in July 2023 that over just a few months, they had collected $38 million in unpaid taxes from over 175 high-income taxpayers. The next step is to increase this effort by seeking unpaid taxes and inaccurate tax return statements from other millionaires, high income earners, and large business partnerships. By the end of the 2024 fiscal year, the IRS anticipates having dozens of trained revenue officers focused on pursuing these high end, high dollar cases.

Split Opinions On The IRS Pursuit Of Delinquent Taxpayers

In 2021, IRS researchers in partnership with academic economists discovered that the top 1% of income earners in the United States generally fail to report over 20% of their earnings. Although many taxpayers who report honestly and pay their taxes on time are appreciative of the IRS’ efforts to pursue those who are delinquent, others are concerned.

In particular, some conservative organizations and taxpayers are concerned that the new resources granted to the IRS which are currently being deployed against high income earners will eventually be used for large scale audits. There is further concern that the IRS may eventually target average, middle class Americans, especially for purposes of political gain. In contrast, Senate Finance Committee Chair Ron Wyden, a Democrat, indicated that IRS actions are a “fresh approach” and that “this action goes to the heart of Democrats’ effort to ensure the wealthiest are paying their fair share.”

The IRS has launched their recent campaigns with the $80 billion that was received in the 2022 Inflation Reduction Act, although Republicans included a $1.4 billion reduction into the budget cuts that were passed this past summer. However, the future of the agency is uncertain. IRS funding could be further cut through other Congressional budget cuts or a future government shutdown.

IRS Audit Representation In Arizona: Former IRS Employees Fight For Your Rights With Silver Law, PLC

If you’re facing an IRS audit, you need representation from Arizona’s leading tax attorney, Silver Law, PLC. Our team of experienced Arizona tax lawyers are former IRS employees, which means we have a solid understanding of both sides of a tax controversy. We use our knowledge, experience, and expertise as we fight aggressively for the rights and interests of our clients. If you’ve received a notice from the IRS and aren’t sure what to do next, contact us to schedule your free, confidential consultation. We will review your legal options, help you understand how tax law applies to your situation, and provide trusted legal guidance.

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