Yellen: Inflation Reduction Act funds helped raise $1.3 billion from wealthy defaulters

Additionally, the IRS said nearly 80% of the 1,600 millionaires who owed taxes had made a payment under an initiative launched in the fall of 2023, leading to a total of $1.1 billion recovered, up $100 million from a previous update in July.

The Treasury said the IRA funding helped facilitate the payment of these taxes since the IRS was previously unable to collect them from these individuals due to lack of resources.

The updates came as Treasury Secretary Janet Yellean and IRS Commissioner Danny Werfel were set to speak on the IRS campus in Austin, Texas.

“We’ve channeled funds from the (Inflation Reduction Act) into significant investments to combat tax evasion,” Yellen said in prepared remarks. “The IRS didn’t have the resources to go after these wealthy tax evaders. Now it does, and we’re making significant progress.”

The IRS said its program for non-filers had been sporadic since 2016 under the Trump administration due to “severe budget and staffing constraints” but had been strengthened under the IRA.

“Between 2010 and 2018, the audit rate for millionaires fell by 80%,” Yellen said in prepared remarks. “During the previous administration, as audit rates for high-income taxpayers fell, the share of audits for taxpayers with incomes below $200,000 rose.

“In 2019, the richest one percent of Americans were estimated to owe more than a fifth of unpaid taxes, leaving ordinary Americans shouldering the burden.”