The IRS advanced nearly 39K high-priority cases in its high-income non-filer initiative after the Treasury Inspector General for Tax Administration (TIGTA) alerted the agency during an audit that the cases remained stalled in first-notice status.
As of June 30, 2025, 38,824 high-priority cases involving 33,653 taxpayers remained in first-notice status and had not progressed through the agency’s normal enforcement process, TIGTA said in the report released Sept. 4.
According to the report, IRS collection function management requested in March 2024 that final notices be delayed due to concerns about available resources to work the cases. The delay prevented the cases from advancing through the return-delinquency process and stopped additional collection notices and enforcement actions.
After TIGTA worked with the IRS on the issue, the agency determined the cause of the problem and took action to move the accounts forward so taxpayers would receive final notices and potentially face additional enforcement action.
The report also found that 10,969 high-priority cases involving 8,853 taxpayers remained in the IRS collection queue awaiting assignment as of June 30, 2025. Those cases represented approximately $2.5B in potential tax liability.
In addition, TIGTA found that the IRS issued first notices in 4,918 cases involving 4,748 taxpayers who had already filed returns. According to the report, many of those taxpayers were included in the initiative because their returns had not yet been processed and posted to their accounts.
The report noted that the IRS estimates the gross tax gap, the difference between tax owed and tax paid voluntarily and on time, for tax year 2022 was $696B. About $63B, or 9%, of that amount was attributable to non-filers.
The IRS said in its response that it has expanded non-filer enforcement efforts in recent years, including the high-income non-filer initiative, and is using analytics, automation, and artificial intelligence to identify potential noncompliance earlier and improve case selection. The agency said it is focusing enforcement resources on taxpayers who pose the greatest compliance risk, while balancing non-filer work with other enforcement priorities.
That’s what the agency said, but let me translate that into plain English.
IRS resources have always been strained. But especially now, after the recent layoffs and other force reduction plans, there are fewer people in enforcement.
As such, they’re going to spend their dollars where they’ll get the most bang for their buck.
Who wouldn’t?
Therefore, if you’re the type of taxpayer who can afford to pay a tax liability, they’ll spend money collecting from you rather than from someone else who is falsely filing a lower-end return while illegally claiming the Earned Income and Child Tax Credits. Even if they spent money and resources on that lower end taxpayer and established a tax bill as low as $5K, do you think they’d ever collect it?
Probably not.
So they’re allocating strained resources to go after people who can afford to pay the tax, interest, and penalty that they actually owe.
They’re coming my Brothers and Sisters and you aren’t going to be able to stop them. Get your returns filed today.
This isn’t a game you’re going to win.
Let me leave you with this…
The Artificial Intelligence (AI) spending spree is having some unintended consequences.
Given the billions being poured into chips, data centers, and power grids, the Federal and State taxation agencies are going to collect less in revenues.
Those investments are eligible for generous tax incentives given the One Big Beautiful Bill Act. Those tax incentives weren’t written with the tech world in mind, but its these businesses that are making the most of them.
Budget forecasters say tax payments from these companies are down 25%, or $96B, after falling 15% last year.
That’s fueling complaints that these investment breaks are providing a windfall for the tech world, and giving a bad deal to taxpayers as Google, Microsoft and others would be spending oodles of cash on AI regardless of the tax incentives.
The AI-fueled hit to the Treasury comes amid a voter backlash against the data hub-building boom that is now roiling Congress ahead of the midterm elections. Lawmakers are pointing fingers over who is responsible for the loss of revenues given our ballooning federal deficit.
The question becomes whether or not they’ll raise taxes, eliminate the incentives, or leave things as they are. Time will tell.
My money would be on maintaining the status quo. The New Administration has repeatedly said and done whatever was necessary to harness and control AI, and the reason is simple.
Say what you want about it, and you’re probably right. Whether it will be good or bad for our country or the future of humanity can be debated, but one thing is certainly true.
History has taught us that no one will ever stop technology. And whatever country controls AI will rule the world for the next several hundred years.
As always, if you’re having problems with your accounting and tax work, I’m waiting for your call.
We’re all going to get through this. Let’s get through it together..
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, Accounting and Tax Work, Tax Planning, or Tax Representation, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
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