Waste of the Day: IRS Enforcement Delayed

Americans underpaid their taxes by an estimated $696 billion in 2022, according to new data released by the Treasury Inspector General for Tax Administration. 

The IRS and its non-filer case backlog

Most of the money came from people and businesses that understated their income. But 9% came from people who didn’t file a tax return at all, and efforts to track them down have been slow-moving as the Internal Revenue Services’ case log remains backed up.

Key facts: The IRS’ backlog of cases increased when its office buildings closed during the Covid-19 pandemic, but the Inflation Reduction Act of 2022 appropriated supplemental funding to help resolve the delays. 

However, Congress reduced that funding in 2025, and the Trump administration laid off 28% of the IRS’ workforce. As a result, the IRS no longer has the resources to pursue all delinquent filers, according to the inspector general.

The inspector general found that nearly 39,000 people with incomes of $400,000 or more were notified in early 2024 that they had not filed a tax return. As of December 2025, the IRS had not followed up with almost 34,000 of them. Their unpaid taxes are worth an estimated $15.7 billion. 

For another almost 11,000 delinquent tax returns, the IRS placed the case in its enforcement queue, instructing agents to take measures like garnishing wages or bank accounts. As of December 2025, 9,463 of the cases have still not been assigned to an IRS agent and remain in limbo. The unpaid taxes are worth an estimated $2.5 billion. 

Mistaken enforcement actions

The IRS is also wasting time and resources on people who paid their taxes honestly. Almost 5,000 people received a notice stating that they did not file a tax return, even though they did. 

The inspector general estimates that the number of people who did not file a tax return almost doubled over seven years, from 8.8 million people in 2015 to 14.7 million people in 2022.

Had the IRS successfully collected all $696 billion of unpaid taxes in 2022, federal revenue would have increased by 14% that year. 

Background: Some of the unpaid taxes come from federal employees themselves. More than 571,000 current and retired federal employees owed $6.3 billion worth of unpaid taxes as of 2024, including thousands within the IRS.

Summary: As politicians debate tariffs and other sources of government revenue, Congress and the White House should also be finding new ways for the IRS to collect the money it’s already owed. 

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.