Talk about your low-hanging fruit. The IRS is finally starting to send letters to people who make $400,000+ but haven't filed a tax return:
One thing nonfilers haven’t had to fear, until recently, was hearing about their shortcomings from the IRS. The agency generally knows who should be filing a return but hasn’t had the staff to handle correspondence with these taxpayers, so it greatly cut back sending out notices, Werfel said.
The first batch of more than 25,000 letters will go out to taxpayers with more than $1 million in income, followed by more than 100,000 letters to people with incomes between $400,000 and $1 million. The notice says to file your return immediately or to explain either why you are late or don’t have to file.
These aren't people who have filed suspicious returns. They aren't people who have claimed dubious deductions. They're people who haven't even filed a return. But until now Republicans have starved the IRS so thoroughly they didn't even have the staff to ask them politely if they wouldn't mind too much filling out a 1040 sometime soon. You know, for the sake of appearances.
I mean.
As Leona Helmesley quipped, "Paying taxes is for little people." Republicans agree!
The Republicans evidently feel tax scofflaws are an important part of their base.
starved the IRS
aka "defund the police".
More projection from the GOP.
Except the GOP actually did it.
EAIAC = every accusation is a confession
“Budget cuts will continue till performance improves” represents the same sort of misguided thinking as “the beatings will continue till morale improves”.
The dead hand of the state writes letters!
Oh! They are sending letters for people who didn't file 2 to 5 years ago. I thought you were saying they were getting ready to ask people to file their 2023 returns at the beginning of march instead of on April 15th.
thanks for the clarification
It's in the link. Kevin should have mentioned that it was for taxes in arrears.
Could they have at least waited until after the budget passed?
BTW, whatever happened to the Donald's audit?
Did you read about how the IRS has a pilot program to fill your simplified tax forms through them? Limited slots, but it's a start, you know, for the wage-earner.
The IRS has a new free e-file program available in a limited number of states this year:
https://www.irs.gov/about-irs/strategic-plan/direct-file
There is also the old free file program that provides access to free commercial tax prep access for people with AGIs under $79,000 as well as fillable forms for anyone:
https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
And finally, there's a whole army of volunteers who will do the work for you for free with training, software and hardware provided by the IRS:
https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers
For anyone who does their own, I want to put in a plug for the fillable forms. They're fillable pdfs like the ones you file on paper, but with this system you file them directly, no paper needed, and no income or residence limitations. So it's basically direct e-filing for anybody.
The catch is that they haven't converted all the forms so you have to make sure they list all the ones you know you'll need, before you put in the time with it.
One advantage this system has is that it's holistic. It'll auto-fill across forms, just like the tax apps, and it also cross-checks forms and flags others that you might need to add. (But flagging that you need it doesn't mean they have it in the right format yet-- last year it caught a missing form they didn't have available so I had to file paper again, but at least I had all the forms I needed. This year they have it.)
Each one of these non-filing scofflaws should be charged with felony tax evasion. Ask Hunter Biden!
Sooooo - explain to me one more time why Hunter Biden is being prosecuted for paying taxes late? He filed taxes where these 125,000 people didn't bother.
Because his last name is Biden. Duh.
I thought evading taxes makes you smart?
Not filing a 1080 doesn't mean you evaded taxes. It means you didn't settle up at the end of the year.
Your taxes get paid at most sources now.
Not investment income...
This irritates the hell out of me; I would certainly prefer at least the option to have it handled automatically on my behalf, like with most income.
But for whatever reason (and they are not all bad reasons; there are issues of controlling cash flow, and issues of not knowing what the bill will be until the end of the year because this sort of income can be very volatile) a lot of the income of people who are making $1M or $400K per year is probably not automatically paid to the IRS.
This is NOT the same thing as me endorsing that deliberate evasion was going on. My comment further below explains what I *think* has been happening in most of these cases.
Yes, investment income.
When you buy and sell, you can file the appropriate tax claim and have it withheld.
It's now default on savings bonds and stock options, even.
somehow I doubt that those people who didn't file are due refunds.
I know I don't file on time every year. I'm in no hurry to get a few dollars back. They only complain when they think the withholding was too little (which was their fault via Trump administration meddling, but whatever).
Agree with jte above. Some % of these 125,000 should be hauled in front of a judge and charged with felony tax evasion. If it's a good enough reason for prosecuting Hunter Biden, it's good enough for prosecuting everyone else.
There are a lot of assumption being made above, in particular the assumption that someone smart enough to generate this level of income is also dumb enough to deliberately avoid filing taxes and assuming they won't get noticed.
This seems, uh, a stretch.
Do we have any knowledge of the details of these cases? My guess is the situation is mostly, probably, situations where a head of household (probably, though not exclusively, the husband) always handled the taxes, including complicated situations like making wife and/or kids passive partners in various partnerships.
Then husband dies, and wife and/or kids have no idea what is going on and how to handle this. They may have no idea who the accountant was, or anything of the web of holdings that generates their income, and they are trying to come to grips with a new life without the person who "always handled that stuff".
In other words my *guess* is that for the most part there is no deliberate fraud here, more simply a "communications error" and IRS (and whoever is the new accountant who was hired) are now trying to clarify any holes in the record from a year or two that was simply forgotten or ignored because each relevant party didn't know the full story, even the newly hired accountant after a year or two may have no idea about certain holdings until the IRS draws attention to them.
"Ignorance of the law is no excuse" is ruthlessly applied to lots of poor criminals and people charged with fraud, many of whom also have sad details in their past that led them astray. Not sure why - checks notes - households making upwards of $400,000 or more deserve more leniency when the head of household sadly dies on them. The remaining spouse can always walk into any of the nation's thousand or so H&R Blocks with the paperwork and ask "hey what do I do with all this stuff?"
I didn't say anything about "leniency" or "morals". I am trying to get to the root of understanding what is going on here, given that I think the default story "25,000 people making $1M a year and 100,000 people making $400K a year are DELIBERATELY not filing tax forms and thinking they will just get away with it" sounds to me like total nonsense.
You know, that thing of trying to UNDERSTAND an issue before you rush in with condemnation...
Holy sh*t!! Thanks for the heads up. I’ll stop checking my mail from now on
Just wait until the IRS can afford AI to predict non-compliance.
The IRS has over NINETY THOUSAND employees. How had they not designed an automated system decades ago to send these letters to non-filers? Something doesn't make sense here.
I find this very strange. My accountant made an error (skipped over a page on a 1099 from Vanguard), and the IRS noticed the 1099s totaled more than I declared for dividends, and sent a letter saying: here's our estimate of what you owe. It took them 2 years, which was a little surprising, but overall, this is trivial to do.
I can't quite believe they don't do that for cases where they have W-2s, 1099s and no return at all. Just add up the income, lookup the amount in the tax tables and send a letter saying "You owe X for tax year Y. If you don't agree, file a return *now*, otherwise we're coming after you."