The US Supreme Court recently ruled in a case called Polselli v. IRS, that the IRS can sometimes secretly probe bank records without notice to taxpayers. Under an existing statute, the IRS can also without notice request and examine bank records of people who don't even owe it money - like friends, family, and associates of a taxpayer who does owe the IRS.

This dispute began when a taxpayer (Remo Polselli) owed more than $2 million in taxes to the IRS.

Those who make more than $400,000 aren't the only people the IRS is looking at regardless of what you hear in the media.

The IRS believes that sole proprietors' underreporting of income and overreporting of expenses cost the government about $182 billion of projected lost revenue not paid voluntarily in tax year 2021 alone.  This figure doesn't even take into consideration underpaid or unpaid self-employment taxes.

Here are some of the suggestions that government auditors are looking at to lower noncompliance:

The Internal Revenue Service has announced work is underway on the Simple Notice Initiative, an effort to simplify and clarify about 170 million letters sent annually to taxpayers.  It's about time and those who have received one can certainly testify to that.

The Simple Notice Initiative will review and redesign hundreds of notices with an immediate focus on the most common notices that individual taxpayers receive. The redesign work will accelerate during the 2025 and 2026 filing seasons, improving common IRS letters going out to individual taxpayers and then expanding into notices going to businesses.