Roz Strategies - May/June 2024

From the Practice Corner: IRS TURNS UP THE HEAT ON NON-FILERS

A recent Internal Revenue Service announcement has created a great opportunity to retain lucrative tax resolution clients. The IRS said that it is focusing its efforts on collecting from high- income taxpayers who have failed to file returns since 2017. Under the spotlight are 125,000 cases, comprising two categories: 100,000 cases involving taxpayers earning between $400,000 and $1 million and 25,000 cases involving taxpayers with incomes surpassing $1 million. This is a result of the Inflation Reduction Act, which has provided the funding to tackle these cases effectively. Prior to this, budget constraints hampered the IRS’s non-filer program, which resulted in sporadic operations. IRS Commissioner Danny Werfel underscored the significance of these resources saying, “With the Inflation Reduction Act resources, the agency finally has the funding to identify non-filers to ensure they meet this core civic responsibility, and ultimately help ensure fairness for everyone who plays by the rules.” The IRS is sending out 125,000 CP59 notices to alert high-income taxpayers of their obligation to comply. The IRS believes these cases involve hundreds of millions of dollars in unpaid taxes, with third parties suggesting more than $100 billion is owed. Commissioner Werfel emphasized the importance of tax compliance stating, “When millions of hardworking people are doing the right thing paying their taxes, we cannot tolerate those with higher incomes failing to do a basic civic duty of filing a tax return.”The IRS has already collected almost $500 million from 1,600 millionaires who were delinquent in their tax obligations. Failure to respond to IRS notices triggers various compliance measures, presenting an opportunity for tax resolution professionals to offer relief to taxpayers.

Americans’ second biggest fear, after public speaking, is dealing with the IRS. The IRS has put high-income taxpayers on notice that they are coming to collect what they believe is owed them. The fear that can be incited is real. But you are the solution these taxpayers are looking for. You can save their financial life from ruin, get them back on track, and let them move on with their lives. However, no taxpayer will know you can assist them if you do not market your services. IRS Commissioner Werfel said, “For those who owe, the risk will just grow over time, as will the potential for penalties and interest. These non-filers should review information on IRS.gov that can help and consider talking to a trusted tax professional as soon as possible.” Even the IRS recommends that taxpayers seek out your services. In light of the IRS’s efforts to collect from high-income taxpayers, the importance of marketing tax resolution services is evident. With the consequences of non-compliance growing over time, tax resolution professionals play a vital role in assisting taxpayers in navigating these challenges. By actively marketing your expertise, you can ensure those in need are aware of the assistance available to them, helping them achieve financial stability and freedom from fear of the IRS. Do not miss out on this opportunity to retain high-income prospects being targeted by the IRS and in desperate need of your services. Market your services and retain new clients today. –Michael Rozbruch

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