After its success targeting millionaires with unpaid taxes, the IRS has launched a new initiative to improve tax compliance among high-income taxpayers who have not filed federal income tax returns since 2017. This effort, funded by the Inflation Reduction Act, involves sending out IRS compliance letters to more than 125,000 cases where tax returns have not been filed since 2017. These mailings began in early April 2024 and include more than 25,000 to individuals with incomes exceeding $1 million and more than 100,000 to those with incomes ranging between $400,000 and $1 million for the tax years 2017 to 2021.
Recipients of these letters should act promptly to prevent further notices, increased penalties, and stronger enforcement actions. If you receive one of these letters, contact us immediately so we can help you swiftly file late tax returns and settle outstanding taxes, interest, and penalties. The failure-to-file penalty is five percent per month, capped at 25 percent of the tax owed. Additional resources are available on the IRS website for non-filers.
The non-filer initiative is part of the IRS’s broader campaign to ensure large corporations, partnerships, and high-income individuals fulfill their tax obligations. Those that don’t respond to the non-filer letter will face further notices and enforcement actions. If someone consistently ignores these notices, the IRS can file a substitute tax return on their behalf., however, it is advisable that you file your own return to claim eligible exemptions, credits, and deductions.