The Internal Revenue Service (IRS) has announced that it will be paying more attention to high-income earners, partnerships, large corporations and promoters who are abusing US tax law.
The shift in focus is due to funding from the Inflation Reduction Act (IRA) which will allow the IRS the means to increase audit rates on the wealthy, partnerships, and other high earners who have experienced sharp drops in audit rates over the past decade due to lack of funding.
To help carry out the audits the IRS plans to leverage its improved technology along with Artificial Intelligence (AI) which is intended to detect tax cheating, identify emerging compliance threats, and improve case selection tools to avoid "no-change" audits.
The IRS stated it will not increase audit rates of taxpayers earning less that USD 400,000 and focus on taxpayers with total positive income above USD 1 million that have more than USD 250,000 in recognized tax debt. This focus builds on past success in which the IRS collected USD 38 million from more than 175 high-income earners. The IRS plans to contact about 1,600 taxpayers that owe hundreds of millions of dollars in taxes.