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IRS Fails to Pursue Thousands of Rich Tax Cheats, Watchdog Says

  • Report finds 879,415 high-income people didn’t pay tax bills
  • Budget cuts have forced agency to scale back enforcement
A pedestrian walks near the U.S. Treasury building in Washington.
A pedestrian walks near the U.S. Treasury building in Washington.Photographer: Andrew Harrer/Bloomberg
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The Internal Revenue Service is letting hundreds of thousands of high-income individuals duck their tax obligations, according to a government watchdog report.

The Treasury Inspector General for Tax Administration found that 879,415 high-income individuals who didn’t file returns cumulatively failed to pay $45.7 billion in taxes from 2014 to 2016 and that the agency hasn’t tried to collect from many of those taxpayers. The IRS didn’t put 326,579 of the cases into its enforcement system, and it closed 42,601 of the cases without ever working on them.