IRS is going after 125,000 Americans who earn more than $400,000 but don't file tax returns: 'This isn’t a small group of people we’re talking about' (2024)

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IRS is going after 125,000 Americans who earn more than $400,000 but don't file tax returns: 'This isn’t a small group of people we’re talking about'? ›

IRS is going after 125,000 Americans who earn more than $400,000 but don't file tax returns: 'This isn't a small group of people we're talking about' Internal Revenue Service Commissioner Danny Werfel, testifies during a House Ways and Means Committee hearing on Capitol Hill, on Feb. 15, 2024, in Washington.

Topline. The Internal Revenue Service announced plans Monday to crack down on a tax loophole some high earners use to take advantage of tax deductions and avoid taxes—a practice the agency says has surged amid a staffing shortfall and budget deficit at the IRS.

The newest IRS initiative will focus on high-income taxpayers who have not filed federal income tax returns. The IRS will mail out compliance letters in more than 125,000 cases where taxpayers have not filed tax returns for years between 2017 - 2021.

For example, the IRS is continuing to pursue millionaires that have not paid hundreds of millions of dollars in tax debt. The IRS has collected nearly $500 million in ongoing efforts to recoup taxes owed by 1,600 millionaires with work continuing in this area.

most returns with positive income of $250,000 or more can reasonably be classified as "high income." For 1983, 260,000 tax returns (or 0.25 percent of all returns) reported TPI of $250,000 or more; nearly 28,000 tax returns reported TPI of $1 million or more.

How does the IRS uncover underreported income? Third-Party Reporting: This is perhaps the most common way the IRS discovers underreported income. Various third parties, such as employers, cash apps, and financial institutions, are required by law to report certain types of income to the IRS using forms like 1099s, W2s.

About filing your tax return

If you have income below the standard deduction threshold for 2023, which is $13,850 for single filers and $27,700 for those married filing jointly, you may not be required to file a return.

For retirees 65 and older, here's when you can stop filing taxes: Single retirees who earn less than $14,250. Married retirees filing jointly, who earn less than $26,450 if one spouse is 65 or older or who earn less than $27,800 if both spouses are age 65 or older. Married retirees filing separately who earn less than ...

At what age is social security no longer taxed? ›

Social Security tax FAQs

Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.

The IRS will increase audit rates by more than 50% on wealthy individual taxpayers with total positive income over $10 million, with audit rates going from an 11% coverage rate in 2019 to 16.5% in tax year 2026.

Examples of nontaxable sources of income include veterans' benefits and life insurance payouts.

New for 2024

The tax items for tax year 2024 of greatest interest to most taxpayers include the following dollar amounts: The standard deduction for married couples filing jointly for tax year 2024 rises to $29,200, an increase of $1,500 from tax year 2023.

According to random audit data, all groups of the population underreport about 4 percent to 5 percent of their income on average. The only exception is the very top of the income distribution. Within the top 0.1 percent—taxpayers with income of more than $1.7 million—detected tax evasion falls to extremely low levels.

According to Lending Tree, high-income taxpayers in the $500,000 to $999,999 bracket received the biggest total dollar amount refund—an average refund of $35,128 in tax year 2020.

A high-income earner is an individual or household that earns a substantial amount of money compared to the average income in the country. High-income earners in the United States make over $500,000, putting themselves in the top 1% of the wealthiest households in the country.