How is the IRS Prioritizing High-Income Non-Filers?

The COVID-19 pandemic has left many struggling to make ends meet or to keep their businesses open. Meanwhile, there have been many conversations at the national level about how economic inequality and how different classes of Americans should be taxed. In a recent column from IRS executives, the agency revealed that it has shifted its focus this year for enforcement efforts on high-income non-filers. At the same time, it is making efforts to help those who are struggling but who are making their “best efforts” to pay their taxes. People who fit this category are encouraged to seek Phoenix tax audit representation from a qualified team.

In the column, “A Closer Look,” Commissioner of the Small Business/Self-Employed Division Erick Hylton writes that taxpayers who are trying to meet their obligations “deserve to know that the IRS is pursuing others who have failed to satisfy their filing and payment obligations.”

The IRS shifted its focus to these high-earning non-filers early in the year, and it contacted taxpayers who made more than $100,000 but who had not filed a tax return before 2019. The agency said that it notified these taxpayers to ensure that they “understood their obligation to file and pay income taxes.” Many responded by filing a return and paying the appropriate taxes, and some entered into payment agreements.

The IRS has pursued those who did not respond aggressively, even hiring more revenue officers to handle these cases. Though the agency initially intended the officers to have more in-person contact, the pandemic forced the efforts to more virtual means. Even with those changes, the agency was still able to identify and begin pursuing about 1,500 of the most egregious cases, some with millions of dollars of suspected, unpaid taxes.

Criminal Tax Investigations

Hylton said in the column that the IRS has also created a new Office of Fraud Enforcement to handle these and other cases. The office also helps to identify emerging threats and to enforce both civil and criminal penalties. The office is working on some non-filer cases that involve tax evasion and tax fraud.

Hylton warned that the IRS has multiple ways to identify high earners, even if they do not file a tax return. He said that many people believe that simply not filing a return will help them “fly under the radar,” but that is not the case. Not only will they be found, but they will also have to pay extensive fines and penalties. They may even face criminal prosecution and may require help from a Scottsdale criminal tax litigation attorney.

Though the IRS announced that it is putting its focus on high earners, that doesn’t mean that anyone is immune from scrutiny or prosecution. Any taxpayer who fails to file a return or who incorrectly reports income or tax obligations can face penalty.

Contact an Arizona Tax Attorney for IRS Audits

If you are facing an audit or other action by the IRS, call Silver Law PLC. Our Scottsdale tax attorneys represent taxpayers in civil and criminal litigation, audits, and more. We’ll help you understand your rights and look for ways to reduce your tax liability. We will fight to help you avoid conviction or penalties. Where that’s not possible, we’ll work to help you get a lower settlement and an affordable payment plan. Call us today to schedule a consultation with a tax attorney and learn more.

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