IRS issues warning on filing taxes

Internal Revenue Service Commissioner Danny Werfel has warned high-wealth earners to pay their fair share of taxes.

In an interview with The Associated Press, Werfel said the agency has implemented major new initiatives in recent months that include cracking down on high-income individuals who don’t pay their full tax obligations.

This includes people who are wrongly deducting personal flights on corporate jets and people who don’t file at all.

“Many corporations are sloppy with their bookkeeping” when it comes to private jet travel, he said. The IRS’s crackdown there “sets the tone for the American people” that everyone has to pay what is due.

The IRS announced in September that it would pursue high-wealth tax dodgers using artificial intelligence and other technology to identify schemes to avoid paying taxes.

Werfel told the AP that those measures are having an impact. Large corporate filers and others are “taking notice that the IRS is ramping up our scrutiny, and I think that will inevitably result in more compliance” and revenue.

Werfel said the agency will also expand its crackdown with new initiatives in the coming months.

With less than a month to go before the filing deadline of April 15, the IRS is also reminding taxpayers to avoid the typical errors on their returns.

The agency is advising taxpayers and their tax advisors to use electronic filing methods such as IRS Free File or alternative e-file service providers. People are advised to collect all essential documents, take care to ensure their filing status, names, birthdates, and other details are correct, report all taxable income, and remember to sign and date the return.

Those requiring more time to file their taxes are advised to request a six-month extension until October 15 and avoid late filing penalties.

The IRS is also piloting a new and free program that allows people to file their returns directly with the IRS without private commercial software.

The new Direct File system is available for taxpayers with very simple W-2s and who claim a standard deduction for their federal income taxes. It is currently available in 12 states: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.

Werfel said more than 50,000 people have started using the Direct File system to complete their taxes.

“People are telling us that they found it to be quick and easy, and everyone certainly loves that it’s free,” he said. He did not provide details about the program’s future.