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The IRS cracks down on non-filers: A growing problem for tax compliance

Thomson Reuters Tax & Accounting  

· 6 minute read

Thomson Reuters Tax & Accounting  

· 6 minute read

The IRS is having a big problem dealing with non-filers – individuals and businesses who fail to file their required tax returns. It’s an issue that’s been around for years, but one that hasn’t been a top priority for the IRS of late. As a result, there’s been a substantial increase in the amount of taxes that aren’t being paid. But now, the IRS is making a new effort to fix the problem, starting with high-income taxpayers.

The growing problem of non-filers

The issue of people not filing their taxes has been a known problem for decades, and the IRS is refocusing its efforts to remedy the issue. The amount of money that’s not being paid in taxes has almost doubled in recent years, from $39 billion in 2016 to $77 billion in 2021. The IRS doesn’t have a complete picture of how bad the problem is because they don’t include estimates for businesses that aren’t filing their taxes.

Holding non-filers accountable hasn’t been as highly prioritized in recent years. But now, the IRS is giving it more attention by restarting programs to make non-filers comply with the law. They’re starting with high-income earners, but that’s only a small part of the problem.

To really solve this issue, the IRS is working on a comprehensive plan. They want to consistently enforce the rules and be proactive about finding people who aren’t filing their taxes. This means sending notices to people they know aren’t filing, investigating the situation, and taking action when necessary. They also need to go after both individuals and businesses to make sure everyone is paying their fair share.

Decline in non-filer enforcement

In recent years, the IRS has struggled to effectively enforce the requirement for individuals and businesses to file their tax returns. This is mainly due to budget limitations and limited resources, which have made it difficult for the agency to pursue non-filers. The IRS has primarily relied on sending notices to those who haven’t filed and using a program called Substitute for Return (SFR), but the enforcement of non-filing through these methods has been inconsistent.

Because of this lack of consistent enforcement, the problem of non-filers has been steadily on the rise. Many non-filers have realized that they can get away with not filing their taxes without facing serious penalties or consequences. This undermines the fairness and integrity of the tax system and leads to a loss of revenue.

To address this issue, the IRS is now taking steps to improve non-filer compliance. They are allocating more funding and resources to increase their enforcement efforts and hold non-filers accountable for their actions.

This renewed focus on non-filer compliance programs is a positive move towards reducing the gap in unpaid taxes and promoting tax compliance. By strengthening enforcement measures and providing sufficient resources, the IRS aims to close the gap and ensure fairness in the tax system.

Restarting non-filer compliance programs

The IRS’s decision to restart non-filer compliance programs is a positive step in dealing with the issue of people who don’t file their taxes. They’re starting by focusing on high-income individuals who haven’t filed their tax returns since 2017. The IRS knows that this group of non-filers only represents a percentage of the larger problem, but it’s a good place to start.

As part of their push for compliance, the IRS has invested in people, technology, and infrastructure to better identify, notify, and go after people who aren’t filing their taxes. By using data analysis and working with other government agencies and partners, the IRS can improve its efforts to enforce the law and make sure non-filers are paying their taxes.

It’s also important for the IRS to keep track of how well these non-filer compliance programs are working. They need to monitor how many non-filers they find, how many of them start filing after being notified, and how much of an impact this has on reducing the number of people who don’t file their taxes. This will help the IRS make any necessary changes and improvements to its strategies and tactics.

The need for a comprehensive strategy

To effectively tackle the problem of people not filing their taxes, the IRS is developing a comprehensive plan. Right now, there isn’t a single department in the IRS that is responsible for dealing with non-filers, which means there isn’t enough focus or a coordinated approach to enforcement. A comprehensive plan would involve clear priorities, enforcing the rules, working with others, and keeping track of progress.

Having clear priorities is important so that the IRS can allocate enough resources and people to deal with non-filers effectively. Notifying and educating non-filers about the consequences of not filing their taxes and helping them understand how to fix the situation is crucial.

Enforcement measures should be consistent and appropriate, including investigations, penalties, and legal actions when necessary. Working with other agencies and partners can make the efforts to catch non-filers more effective. And finally, the IRS needs to keep track of how well they’re doing by monitoring key information and making any necessary changes to their strategies.


The IRS’s renewed focus on non-filers is a necessary step to tackle the growing non-filing tax gap. The decline in non-filer enforcement in recent years has allowed this problem to escalate, requiring urgent action. By restarting non-filer compliance programs and developing a comprehensive strategy, the IRS can begin to address the issue effectively.

It is crucial for the IRS to broaden its reach to both individuals and businesses and ensure that non-filers are held accountable for their tax obligations. Only through consistent enforcement and a proactive approach can the IRS reduce the non-filing tax gap and promote tax compliance for all taxpayers.

For more information on important tax-related topics, check out our blogs on the continued interest in the Employee Tax Credit and grace periods for retransmission of rejected e-filed returns.

You can also visit our hub pages to learn more about IRS Audit and tax compliance.

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