The IRS is implementing new enforcement measures targeting high-income earners, large partnerships, and people with foreign bank accounts. The agency claims these actions will restore fairness to the tax system, focusing on wealthy taxpayers who have seen a significant decline in audit rates.
Individuals earning over $1 million with recognized tax debt exceeding $250,000 are at the center of the IRS’s crackdown. 1600 taxpayers fitting these criteria collectively owe hundreds of millions in unpaid taxes. The agency plans to employ specialized revenue officers starting in fiscal year 2024 to collect from these high-end delinquent accounts.
Additionally, large partnership tax returns are under scrutiny as the IRS aims to open audits for 75 of the largest partnerships by the end of September. This initiative, fueled by AI, seeks to detect anomalies and target non-compliant returns more efficiently.
The IRS is expanding enforcement for failure to disclose foreign bank and financial accounts, especially for taxpayers with average account balances exceeding $1.4 million. Penalties for willful failures to disclose required information can be severe, thus compliance with FBAR filing obligations is crucial.
The agency wants to reassure moderate and lower-income taxpayers that they won’t be affected by these measures. However, taxpayers with large partnership interests or foreign financial accounts may face increased scrutiny.
In conclusion, taxpayers falling into these categories should consider seeking qualified tax advice, proactive compliance, and accurate responses to IRS notices to minimize potential penalties and interest.
For those in need of financial advice, a financial advisor with tax expertise is recommended. SmartAsset’s free tool can help you to find and connect with such advisors.
On the other hand, if you are a DIY tax filer, picking the right software to file your return is essential. SmartAsset has reviewed various options and compiled a list of the best software for different kinds of filers.
