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An influential Democratic senator has blasted the Internal Revenue Service (IRS) for doing such a bad job of going after rich tax cheats that hundreds of millionaires no longer even bother to file their tax returns.
In a strongly worded letter to IRS Commissioner Danny Werfel, Sen. Ron Wyden (D-OR), the chairman of the powerful Senate Finance Committee, urged the agency to do more to crack down on wealthy individuals who are breaking the law by not filing their tax returns.
“New data provided to the Committee by the IRS has identified staggering levels of noncompliance and criminality by high-income non-filers,” Wyden wrote. “While I commend the new IRS enforcement initiative focusing on high-income earners and large corporations, I believe resources from the Inflation Reduction Act should also be used to crack down on this particularly brazen form of tax evasion.”
This behavior is especially egregious because the entire tax code is already rigged toward wealthy Americans and corperations. It is not only riddled with loopholes, but these individuals and companies also have enough money to employ entire teams of lawyers and accountants to take full advantage of all of them.
Wyden noted that the IRS’s inability to go after wealthy tax cheats is not an accident.
“Over the last decade, Congressional Republicans have led the push to cut IRS resources in order to let wealthy tax cheats off the hook — and according to this data they’ve succeeded,” he wrote. “Odds are, if you’re a wealthy tax cheat that doesn’t even bother to file a tax return, you’ll get away with it.”
Specifically, the senator noted that IRS data shows that more than 1.4 million high-income taxpayers had not yet filed tax returns for the years from 2017-2020 and that the unpaid taxes potentially owed by them is $65.7 billion.
Wyden especially pointed to more than 10,000 repeat offenders who had not filed returns for multiple years and owed more than $100,000 each in unpaid taxes.
For these individuals, simply not filing a tax return is a numbers game.
“Of these 10,272 repeat offenders, only 154 have ever been under criminal investigation, and only 31 were in active criminal investigation this year,” the senator wrote.
Ironically, one high-income individual who has been indicted for not paying his taxes in (some) of these years is the son of Werfel’s boss — Hunter Biden.
In his letter, Wyden argues that he should be the rule and not the exception.
“As Republicans continue to clamor for a highly selective prosecution and the incarceration of Hunter Biden, the evidence shows that thousands of other wealthy scofflaws have managed to avoid prosecution without ever filing tax returns or paying the large sums of back-taxes owed,” the senator wrote.
It’s time to go after each and every one of them, Wyden told Werfel.
“I urge the IRS to initiate enforcement actions against every single millionaire non-filer as part of its ongoing effort to use Inflation Reduction Act funding to restore fairness in tax compliance.”
