$172 million recovered from 21,000 wealthy taxpayers who have not filed tax returns since 2017 in first six months of new initiative 

WASHINGTON — Today, U.S. Secretary of the Treasury Janet L. Yellen and Commissioner of the Internal Revenue Service Danny Werfel are delivering remarks at the Austin, Texas, IRS campus to announce new milestones under Inflation Reduction Act initiatives to ensure wealthy individuals pay taxes owed, improve service for taxpayers through the Digital First Initiative and modernize foundational technology.

Ensuring high-income, high-wealth taxpayers pay taxes owed

  • The IRS in February 2024 launched an initiative to pursue 125,000 high-income, high-wealth taxpayers who have not filed taxes since 2017. These are cases where IRS has received third party information—such as through Forms W-2 and 1099s—indicating these people received income between $400,000 and $1 million or more than $1 million, but failed to file a tax return. Prior to the Inflation Reduction Act, the IRS non-filer program ran sporadically since 2016 due to severe budget and staff limitations that did not allow these cases to be pursued. With new Inflation Reduction Act funding, the IRS now has the capacity to do this core tax administration work. In the first six months of this initiative, nearly 21,000 of these wealthy taxpayers have filed, leading to $172 million in taxes being paid.
  • The IRS in the fall of 2023 launched a new initiative using Inflation Reduction Act funding to pursue high-income, high-wealth individuals who have failed to pay recognized tax debt, with dozens of senior employees assigned to these cases. This work is concentrated on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt. The IRS was previously unable to collect from these individuals due to a lack of resources. After successfully collecting $38 million from more than 175 high-income, high-wealth individuals last year, the IRS expanded this effort last fall to around 1,600 additional high-income, high-wealth individuals. Nearly 80% of these 1,600 millionaires with delinquent tax debt have now made a payment, leading to over $1.1 billion recovered. This is an additional $100 million just since July, when Treasury and IRS announced reaching the $1 billion milestone.

Improving taxpayer service through the Digital First Initiative

With Inflation Reduction Act resources, the IRS is significantly improving taxpayer service in person, over the phone, and online. The IRS is working to deliver the same modern online experience that taxpayers experience with their bank or financial institutions. Using Inflation Reduction Act resources, the IRS has created and enhanced popular and convenient online tools that save taxpayers time and money, while also reducing phone calls, paper processes, and other burdens on IRS employees. For example, in Filing Season 2024, IRS updated the “Where’s My Refund?” tool to provide more detailed refund status information in plain language, increasing use by nearly 30%.

Thanks to Inflation Reduction Act resources, the IRS has launched more digital tools in the last two years than the previous 20 years, including:

  • More than two dozen new features and enhancements to Individual and Tax Professional Online Account;
  • The launch of Business Tax Account;
  • The release of 30 digital mobile-adaptive forms;
  • The ability for taxpayers to receive their refund status via a conversational hotline;
  • A mobile-friendly web tool for Where’s My Refund; and
  • Direct File, a new tool that allows taxpayers to file for free, directly with the IRS.

Through the Digital First Initiative, the IRS is pursuing a vision where taxpayers can do all their transactions with the IRS digitally if they prefer. At the core of that improved digital experience for taxpayers are enhancements to Individual Online Account. Thanks to funding from the Inflation Reduction Act, taxpayers can now:

  • View the status of refunds and certain audits.
  • Access a complete overview of their account information, including detailed historical data.
  • Access identity protection services, a lien payoff calculator, and the ability to complete the pending installment agreement process using smartphones or tablets—all critical as taxpayers prepare for Filing Season 2025.
  • Retrieve tax related information from a single source, including digital copies of notices and letters—with more than 170 different types of notices and letters currently available in their Online Account. The agency’s goal is to make an additional 98 notices available for digital viewing, reaching a total of 268 notices digitally available by the end of 2024.

Through the Simple Notice Initiative, the IRS is also redesigning up to 200 individual taxpayer notices to be shorter and clearer, reducing taxpayer frustration and the number of phone calls requiring live assistance, for Filing Season 2025. The IRS has completed 109 notices as of the end of July 2024.

Additionally, Tax Pro Online Account rolled out more self-service options for tax professionals, including easier navigation to secure two-way messaging where authorized tax professionals can digitally communicate with the IRS on behalf of their clients. The IRS is also continuing to expand the features within Business Tax Account, an online self-service tool for business taxpayers that now allows them to view and submit balance-due payments. The account is also now accessible in Spanish, with more translations planned.

Modernizing 65-year-old foundational technology to improve taxpayer service and better secure taxpayer data

  • For 65 years, the IRS has relied on the same foundational technology for many of its critical systems, including the Individual Master File (IMF), which houses taxpayer data and feeds into key systems. The core technology, based on ALC and COBOL coding, has become a liability due to the diminishing pool of experts proficient in this legacy language.
  • The IRS has reached a critical milestone in modernizing a core technology component of the Individual Master File, by porting the outdated Assembly-based codebase to Java, a more modern, more sustainable language. Reflecting the agency’s focus on technology best practices, this new system, Integrated Tax Processing Engine (ITPE), is now running simultaneously with IMF to verify accuracy of its data processing. The system’s data will be hosted in the Enterprise Data Platform, a modern, cloud-based system for managing data.
  • Making taxpayer history available in a modern data environment is a key step toward the IRS implementing real-time data processing with platforms that will enable transactions to be processed more quickly, transparently, and securely. These improvements are a critical enabler for the IRS’s Digital First Initiative. For example, it will improve taxpayer service by allowing taxpayers and customer service representatives to access real-time account information in the future just as any bank or financial institution does. These improvements will also empower IRS to implement tax code changes and emergency benefit programs more quickly, while reducing the costs of maintaining IRS systems. This project was delayed for years due to underfunding.

IR-2024-233

Pederson Tax Services