The IRS reports that affluent households have paid $1 billion in back taxes. 

The tax authority just never made an effort to pursue the substantial debts that 1,600 individuals with yearly incomes of at least $lion owed.

After years of years of past-due tax debt accumulation and a decline in IRS enforcement, hundreds of rich households owing the IRS $1 billion in taxes and penalties, which the agency finally acknowledged on Wednesday.

"The taxes were obviously owed by these individuals—the tax bill wasn't even in dispute," IRS Commissioner Danny Werfel stated during a conference call with reporters. However, we lacked both the manpower and the means. Staffing and time are required to resolve these issues.

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dir="ltr">After years of workforce reductions, the tax agency has hired hundreds of qualified accountants over the past 18 months thanks to $60 billion in new money from the 2022 Inflation Reduction Act. A subset of tax delinquents, comprising 1,600 households with yearly incomes over $1 million and a known debt of at least $250,000 in back taxes as determined by their prior tax filings, have been the target of some of their efforts. IRS officials acknowledge that due to staffing shortages in the past, their agents failed to pursue tax collection for an extended period of time.

The new enforcement campaign began last year with letters sent to at least 1,500 persons in the target demographic reminding them of their obligations, according to Werfel. According to Werfel, around 100 of them paid a total of $100 million in taxes, interest, and penalties in the first month or so.

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Others required significantly more work, and in some cases, levies on taxpayer assets, to recover the funds. Werfel recounted months of correspondence between the IRS's new agents and the billionaires' accountants and attorneys.

This week, IRS officials revealed an effort aimed at those who had filed tax returns but had not paid. The IRS is also targeting a much larger group: affluent individuals who have not filed any returns at all.

The IRS ceased mailing reminder letters to taxpayers who had not filed in 2017. It resumed the practice this year, telling up to 25,000 persons who previously reported annual incomes of more than $1 million, as well as up to 100,000 people who earned more than $400,000 per year, that they had failed to  one or more recent years.

Werfel stated that the amount of money raised by such letters would probably be reported by the agency in the fall.

"An environment where a growing number of people believe they can't pay their taxes is created when the IRS is not fulfilling its mandate and responsibility to enforce the tax laws," Werfel said. "Notifications such as these, which show that we are proactively seeking out non-filers and past-due taxpayers, serve as a warning to other taxpayers."