Newsletters

IRS Official Details Enforcement Agenda For High Earners

The Internal Revenue Service is keeping the pressure on high income taxpayers who do not file their taxes as well as other high wealth taxpayers who may otherwise be hiding their earnings to avoid paying taxes.

And while agents are actively pursuing these people, Darren Guillot, Commissioner of the IRS Small Business/Self-Employed – Collection division said the goal is to avoid as much as possible escalating a case to enforcement proceedings.

His message on November 15 to attendees of the AICPA & CIMA National and Sophisticated Tax Planning Conferences in Washington, D.C., was a simple one: “Just tell the truth. We want to get you in compliance. We want you to file on time and pay what you owe. Every case is not criminal. We don’t want any case to be criminal, or enforcement or a seizure.”

HiDeF Sweeps

To that end, he highlighted some of the activities the agency is engaged in that target high income non-filers, which he defined as earning at least $100,000 in income from a third-party source. The agency is employing data analytics to identify these individuals and are engaging these taxpayers through what is called High Income Delinquent Filer (HiDeF) Sweeps, which began in December 2018.

The analytics identified those who meet the income threshold and had at least three years of unfiled returns. The agency then proceeded with unannounced field visits, though those were moved to a virtual environment because of the COVID-19 pandemic.

Guillot said these personal interactions with agents have been key in collection activities. “It sends a message,” he said. “We just want to hear from you. And you certainly are going to hear from us.”

He noted that in 2019, there were 9.5 million non-filers and of them, more than 843,000 were high income non-filers. He said the program HiDeF program would be continuing for years to come. For those instances that involve egregious noncompliance and/or potential fraud, the IRS has what is called Operation Surround Sound, a collaboration beween the Office of Fraud Enforcement, Collection and Examination Operations.

These types of cases could involve significantly higher amounts of earned income, as well as foreign holdings and cryptocurrency. And again, Guillot reiterated the advice of “just tell the truth” about what is going on and get back into compliance before it has a chance to become an enforcement action that could entail measures such as levies, asset collections, repatriation of foreign assets and revocation or denial of passports.

Busting Ghost Employers

Guillot also highlighted another target the agency recently began focusing on: ghost employers. These involve employers who provide a W-2 to their employees but do not file the proper forms or pay the money owed to the IRS or the Social Security Administration.

Again, he pointed to the agency’s use of data analytics, which uncovered this scheme, and in a relatively short amount of time, revenue officers were able to help launch a number of criminal investigations. He said the work in this area is going to continue.

Other areas the IRS is focused on include employers who fraudulently applied for COVID assistance to help keep their employees, which he noted that work in this area has stopped hundreds of millions of dollars in payments; tracking transactions of more than $10,000 in cash where no tax returns are filed; and efforts that are focusing on high income earners and under-reporting of income in gig economy segments.

FAQs Released on Energy Efficient Home Improvements and Residential Clean Energy Property Credits, FS-2022-40

The IRS has released frequently asked questions (FAQs) about energy efficient home improvements and residential clean energy property credits. The […]

Read More
FAQs Released on Energy Efficient Home Improvements and Residential Clean Energy Property Credits, FS-2022-40

IRS, DOL Renew Employee Misclassification Memorandum of Understanding

The Internal Revenue Service and the U.S. Department of Labor announced they have renewed a memorandum of understanding (MOU) under […]

Read More
IRS, DOL Renew Employee Misclassification Memorandum of Understanding

Transitional Guidance on Broker Digital Asset Reporting Provided, Announcement 2023-2

The Treasury Department and IRS have announced that brokers are not required to report additional information with respect to dispositions […]

Read More
Transitional Guidance on Broker Digital Asset Reporting Provided, Announcement 2023-2

IRS Completes Final Corrections on 2020 Unemployment Compensation Tax Payments, IR-2023-2

The IRS recently completed the final corrections of tax year 2020 accounts for taxpayers who overpaid their taxes on unemployment compensation received in 2020. […]

Read More
IRS Completes Final Corrections on 2020 Unemployment Compensation Tax Payments, IR-2023-2

FL - Additional guidance issued on tax relief for property made uninhabitable by Hurricanes Ian or Nicole

The Florida Department of Revenue has issued additional guidance regarding property tax relief for residential properties rendered uninhabitable for 30 […]

Read More
FL - Additional guidance issued on tax relief for property made uninhabitable by Hurricanes Ian or Nicole

2023 Standard Mileage Rates Released, Notice 2023-3

The IRS released the optional standard mileage rates for 2023. Most taxpayers may use these rates to compute deductible costs […]

Read More
2023 Standard Mileage Rates Released, Notice 2023-3

Inflation Reduction Act Triggers Numerous Tax Form Changes

The passage of the Inflation Reduction Act in 2022 has triggered changes to many tax forms, tax form instructions, and […]

Read More
Inflation Reduction Act Triggers Numerous Tax Form Changes

IRS Reminds Taxpayers to Check Tax Withholding Now to Avoid Paying Future Quarterly Estimated Payments, FS-2023-1; IR-2023-10

The IRS reminded taxpayers who earn wages to use the Tax Withholding Estimator tool to adjust their 2023 withholding. Checking now and […]

Read More
IRS Reminds Taxpayers to Check Tax Withholding Now to Avoid Paying Future Quarterly Estimated Payments, FS-2023-1; IR-2023-10

FL - Taxpayer properly applied cost-of-performance rule to its income producing activities

An out of state subsidiary (taxpayer) of a nationwide online and brick-and-mortar retailer (retailer) properly sourced its service revenue under […]

Read More
FL - Taxpayer properly applied cost-of-performance rule to its income producing activities

FL - Guidance provided on tax relief for properties made uninhabitable by Hurricanes Ian or Nicole

Florida provides guidance regarding property tax relief for residential properties rendered uninhabitable for 30 days or more due to Hurricanes […]

Read More
FL - Guidance provided on tax relief for properties made uninhabitable by Hurricanes Ian or Nicole