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IRS Announces New Initiative Targeting High-Income Individuals Who Did Not File A Tax Return – A Risk of Criminal Liability by Steve Toscher, Sandra Brown, Evan Davis and Luke Ryan

On February 29, 2024, the IRS announced a new initiative targeting approximately 125,000 high-income taxpayers who have failed to file federal income tax returns since 2017. With funding from the 2022 Inflation Reduction Act, the IRS will send compliance letters to these individuals, including over 25,000 letters to individuals with incomes above $1 million and over 100,000 letters to those earning between $400,000 and $1 million. The new initiative aims to address tax non-compliance, with penalties for failure to file ranging up to 25% of the non-filer’s tax bill, potentially a 75% penalty for willful failures, and potential criminal liability. The IRS believes that hundreds of millions of dollars in unpaid taxes are involved.

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