How High-Income Non-Filers Cheat the IRS — And How It Impacts the Rest of Us

You scrimp and save so you can pay what you owe during tax season — and you expect others to do the same. Unfortunately, those in the best position to pay up often neglect to do so. This tendency has only accelerated in the midst of the coronavirus pandemic. With the IRS suspending collections and other consequences, non-filers feel empowered to cheat the agency and the American public. Even before coronavirus, this blatant disregard was unsettling.

How Bad Is the Non-Filing Situation?

A recent report from the Treasury Inspector General for Tax Administration (TIGTA) indicates that nearly one million high-income non-filers neglected to abide by tax obligations between 2014 and 2016. Together, these non-filers owe an estimated $45.7 billion for this period.

Citing limited resources, researchers anticipate that the IRS will fail to hold these individuals accountable. Officials from the IRS, however, insist that they are making every effort to ensure compliance. A representative told researchers, “It will take time and additional resources to restore our enforcement levels to ensure we have a strong, visible and robust tax enforcement presence.”

How Does Noncompliance Impact the Economy?

In a time of limited resources, every tax dollar counts. Among high-income individuals, nonpayment can lead to significant losses in revenue. As a result, already struggling middle-class and low-income taxpayers must shoulder a greater share of the burden.

Tax evasion also begets further evasion. If they believe that high-income individuals can get away with nonpayment, other taxpayers may follow in their footsteps.

It’s only natural to feel angry about the many ways in which non-filers cheat the IRS — especially if you’re currently struggling to handle tax debt. The Highland Tax Group can provide the advocacy you need to ensure a fair fight. Contact us today to learn how we can assist you with your current IRS issues.