The Savings Game: IRS targets high-earners who fail to file
The Internal Revenue Service is now targeting high earners who have failed to file a tax return for several years.
Early in 2024, the IRS started sending notices to taxpayers who earned more than a million dollars and haven’t filed for several years. In those notices, the IRS is asking taxpayers to either file a return or explain why they have not done so. The IRS is warning those taxpayers to respond quickly or face even larger penalties or more significant enforcement policies.
Some nonfilers are receiving notices if their earnings exceeded $400,000, but the emphasis is on taxpayers who had previously reported incomes exceeding $1 million.
According to representatives of Kostelanetz LLP, a Washington law firm with expertise in this area, if taxpayers do not respond to the initial notice, the next steps the IRS takes may be more severe. The IRS apparently has based its initial notices on information they have received, such as W2s or 1099s, or other information they have that suggests that these taxpayers should have been filing returns.
