The Blubber

The IRS has restated its promise not to increase audits for Americans making less than $400,000 a year, per CNBC.

The IRS is launching an initiative to crack down on 1,600 millionaires and 75 large businesses including hedge funds that it says owe hundreds of millions of dollars in back taxes.

IRS Commissioner Daniel Werfel said that with a boost in federal funding and the help of artificial intelligence tools, the agency has new means of targeting wealthy people who have “cut corners” on their taxes.

“If you pay your taxes on time it should be particularly frustrating when you see that wealthy filers are not,” Werfel told reporters in a call previewing the announcement. He said 1,600 millionaires who owe at least $250,000 each in back taxes and 75 large business partnerships that have assets of roughly $10 billion on average are targeted for the new “compliance efforts.”

Werfel said a massive hiring effort and AI research tools developed by IRS employees and contractors are playing a big role in identifying wealthy tax dodgers.

“New tools are helping us see patterns and trends that we could not see before, and as a result, we have higher confidence on where to look and find where large partnerships are shielding income,” he said.

In July, IRS leadership said it collected $38 million in delinquent taxes from more than 175 high-income taxpayers in the span of a few months. Now, the agency will scale up that effort, Werfel said.