Biden’s Policy Could Assist IRS in Recovering Up to $851 Billion in Unpaid Taxes from the Ultra-Rich

By Better Today On Feb 9, 2024

TL/DR –

The Internal Revenue Service (IRS) is set to collect hundreds of billions of dollars in overdue taxes from the ultra-rich, due to funding from President Biden’s Inflation Reduction Act (IRA). It is estimated that tax revenues could rise by as much as $561 billion from 2024 to 2034 due to increased enforcement funded by the IRA. The IRS and the Treasury Department are focusing on tracking down wealthy individuals and businesses with unpaid taxes, however, they will not be targeting families earning under $400,000 per year.

The IRS Set to Collect Additional Tax Revenue from the Ultra-Wealthy

The Internal Revenue Service (IRS) is ready to collect hundreds of billions in additional tax revenue from the ultra-wealthy, made possible by President Biden’s Inflation Reduction Act (IRA).

Expected Rise in Tax Revenues due to Increased Enforcement

IRS and the Treasury Department’s estimates indicate that tax revenue could increase by $561 billion between 2024 and 2034 due to enhanced enforcement facilitated by the IRA.

If the IRA is renewed, the additional revenues could reach up to $851 billion, as suggested by the Biden administration.

IRS Collection from Millionaires

Using the funds provided by the 2022 law, the IRS has already collected over $520 million from 1,600 millionaires with unpaid tax bills exceeding $250,000.

The Treasury and the IRS focus on wealthy individuals and businesses with unpaid taxes, not families earning under $400,000 annually.

President Biden’s Tax Fairness Initiative

President Biden proposed a billionaire tax and committed to not increasing the tax for families earning under $400,000 annually, in line with his priority to make the tax system more equitable.

At a campaign event in November, Biden emphasized his desire for everyone to pay their fair share of taxes.

Challenges to IRS Funding and Tax Loopholes

Republican lawmakers are attempting to cut IRS funding amid news of a tax loophole that enabled the richest Americans to amass $8.5 trillion in untaxed profits in 2022.

In debt ceiling negotiations last year, Republicans negotiated a $20 billion cut in the initial $80 billion provided to the IRS under the IRA.

The Impact of IRA Funding on the IRS

The IRA funding came at a critical time for the IRS, helping it track tax evaders and close the tax gap—the difference between taxes owed and taxes paid—which has grown to over $600 billion annually.