Wealthy Americans Hold Back $600 Billion in Taxes Annually, Treasury Says

WASHINGTON - The Biden administration says wealthy Americans withhold more than $600 billion in unpaid taxes from the Treasury every year, and it has proposed a detailed plan to bulk up the Internal Revenue Service’s enforcement arm in an effort to increase tax compliance among high net worth individuals.

Total unpaid taxes “will rise to about $7 trillion over the course of the next decade if left unaddressed — roughly equal to 15% of taxes owed,” a report issued by the Treasury Department on Thursday said. “These unpaid taxes come at a cost to American households and compliant taxpayers as policymakers choose rising deficits, lower spending on necessary priorities, or further tax increases to compensate for the lost revenue.” Improving the IRS’s ability to track down tax cheats will generate approximately $700 billion in additional revenue over 10 years, and far more in the years after that, the administration says. Tax cheating is an international reality of life. The administration's estimate that the U.S. loses about 15% of the tax revenue it is owed to non-compliance places it at a level similar to the 16% across the European Union, according to research conducted at the University of London. The study found that across the EU, a little more than $1 trillion in taxes went uncollected in 2015.