The Treasury now recovers a whopping $1.3bn in unpaid taxes from high net worth individuals who sought to dodge paying.

The IRS announced on Friday that it has collected $1.3 billion from wealthy tax evaders since last fall, attributing this success to increased enforcement efforts funded by President Joe Biden’s climate, health care, and tax legislation enacted in 2022.

Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel visited an IRS campus in Austin, Texas, to highlight this achievement amid warnings from Republicans about potential budget cuts for the agency if they regain control of the White House and Congress.

In her speech, Yellen pointed out that in 2019, the wealthiest 1% of Americans were responsible for over 20% of unpaid taxes, leaving a heavier burden on average taxpayers.

“To address this, we’ve directed IRS funding toward substantial investments to tackle tax evasion,” she stated.

In 2023 and 2024, the IRS initiated several programs targeting high-income individuals who have not paid their tax obligations.

The focus is on taxpayers with incomes exceeding $1 million and tax debts over $250,000.

According to IRS officials, nearly 80% of the 1,600 millionaires identified for delinquent taxes have since made payments, resulting in over $1.1 billion recovered.

Additionally, in the first six months of a new initiative launched in February 2024, the IRS collected $172 million from 21,000 wealthy individuals who had not filed tax returns since 2017.

Republicans have advocated for cuts to IRS funding, with Donald Trump’s presidential campaign promising to significantly reduce federal agency spending.

Trump’s campaign also criticized Democratic nominee Kamala Harris for her role in hiring 87,000 new IRS agents, a claim that stems from a Treasury proposal to expand the IRS workforce over the next decade if additional funding is secured.

With around 50,000 IRS employees expected to retire in the next five years, the agency is seeking to bolster its staff, reports ABC News.

The National Taxpayer Advocate, an independent IRS oversight body, reported that the IRS currently employs about 681 armed agents.

This year, the IRS also launched a program called Direct File, allowing individuals with simple W-2 forms to directly calculate and submit their tax returns to the agency.

In April, the IRS noted that participants in this program claimed over $90 million in refunds.

While 12 states participated in the Direct File program for the 2024 tax season, more states, including Maryland, Oregon, New Jersey, Pennsylvania, New Mexico, Connecticut, North Carolina, Wisconsin, and Maine, are set to join for the 2025 tax season.

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Also Read: The US Treasury Direct is Now Freezing Customer Accounts

Other Economy News Today

TD Bank now says plans to open branches has slowed as it tackles its anti-money laundering issues and sets aside money for penalties.

TD Bank is currently under civil and criminal investigations regarding its U.S. anti-money laundering (AML) program.

These probes are linked to allegations that traffickers laundered over $653 million associated with fentanyl through the Bank, with claims that bank employees were bribed by criminals.

In response to these AML issues, TD’s expenses have increased significantly, reports Banking Dive.

The bank has allocated approximately $3.57 billion for potential penalties and fines related to these matters and anticipates reaching a “global resolution” by the end of the year.

To address the situation, TD has invested in enhancing its risk management and control systems, with last quarter’s expenses totaling $11 billion.

Executives expect AML-related costs to peak in early 2025.

Last year, TD announced plans to open 150 new branches in the U.S. by 2027, following the unsuccessful attempt to acquire First Horizon for $13.4 billion.

However, analysts are concerned that the ongoing AML investigations could hinder the expansion of the bank’s U.S. operations.

Leo Salom, TD’s U.S. CEO, acknowledged the uncertainties surrounding the branch opening plans during a May meeting with analysts, stating that more clarity would be provided when possible.

While TD’s CEO Bharat Masrani did not share specific updates on the branch plans, he emphasized that resolving the AML issues remains the bank’s top priority.

He noted that the U.S. division, which serves around 10 million customers, has been performing well.

TD representatives did not immediately respond to inquiries about the revised branch opening numbers or any potential employee terminations or compensation changes.

Regarding lessons learned from the AML situation, Masrani highlighted the importance of establishing clearer accountabilities across different risk areas and ensuring timely communication of critical information to the appropriate staff within the organization.

He acknowledged that, in a bank of TD’s size, there can be challenges in maintaining clear accountability.

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Also Read: A Massive US Bank is Now Closing Credit Cards

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