IRS Official Details Enforcement Agenda For High Earners, (Nov. 18, 2021)

The IRS is keeping the pressure on high-income earners who fail to file tax returns, and others who may hide their earnings to avoid paying taxes.

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 simple: “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.”

To that end, he highlighted some of the activities the IRS is engaged in to target high income non-filers, defined as those earning at least $100,000 in income from a third-party source.  The IRS employs data analytics to identify these individuals with at least 3 years of unfiled returns, then engages these taxpayers through what is called High Income Delinquent Filer (“HiDeF”) Sweeps, which began in December 2018.

In 2019, there were 9.5 million non-filers and of them, more than 843,000 were high income non-filers. He said the HiDeF program will continue for years.  For those instances involving egregious noncompliance and/or potential fraud, the IRS has what is called Operation Surround Sound, a collaboration between the Office of Fraud Enforcement, Collection and Examination Operations.

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.  For some, revenue officers were able to help launch criminal investigations.