With tax season coming to a close, millions of dollars are going unpaid in Texas. Taxpayers owing $100,000-$999,000 in unpaid taxes are going unnoticed due to the short-staffing in revenue agents, revenue officers and criminal investigators. Five thousand fewer positions that go after the millionaire tax cheats have been dissolved in the state, leaving 1,000 wealthy taxpayers free of their payment obligations. Budget cuts by Congress are leading to these over-looked cases, and the numbers are only continuing to decrease.
Since 2010, there has been a 15 percent decrease in revenue officers and 16 percent decrease in revenue agents in Texas. The state simply does not have enough of these people who go and knock on the door of taxpayers asking for the tax money they owe. The process, which is actually quite simple, is beginning to unravel and leading to drastic loss. Agencies can only go after the unpaid taxes totaling one million or more due to the demands.
Even if the IRS wanted to simply garnish the person’s wages, many millionaires do not receive regular paychecks that can be garnished like employed workers. Their irregular income is difficult to track and withhold so it can’t just go towards their unpaid taxes.
The hot topic of tax rate equality is already on the rise with percentages showing the middle class paying more in taxes than the upper class. “The poorest 20 percent of Americans paid an average of 10.9 percent of their income in state and local taxes and the middle 20 percent of Americans paid 9.4 percent. The top 1 percent, meanwhile, paid only 5.4 percent of their income to state and local taxes,” according to the study by The Institute on Taxation and Economic Policy.
To put it shortly, millions of tax dollars are going unclaimed due to short staffing. This problem will only continue alongside the increased number of position cuts.
Sourced from Washington Post Article and The Institute on Taxation and Economic Policy’s study covered by CNBC.