Finance Chair Wyden Reveals Shocking New Data About Wealthy Individuals Who Have Failed to File Tax Returns; Nearly 1,000 millionaires Have Not Filed Returns and Owe Estimated $34 billion in Taxes; Few Wealthy Non-Filers Are Prosecuted.
According to the latest IRS data, the top 1% of earners paid 40.4% of all federal income taxes in 2022. This underscores the extent to which the burden of the income tax system falls on taxpayers from the highest income groups.
There are several ways you might reduce your estate, including spending assets, giving assets away, buying life insurance and putting assets in trusts. For most people who are impacted by the estate tax, trusts are integral to reducing an estate's size and may help to reduce estate taxes.
Pete Rose. Considered one of the greats of the game, baseball superstar Pete Rose soon became as infamous for tax evasion as he was celebrated for being an all-time leader in hits in Major League Baseball. Rose had a $500,000 debt to the IRS for filing false tax returns from 1984-1988, and again in 1998.
Walter Anderson was involved in the biggest tax evasion case by a single individual that amounted to $365,000,000 in unreported income.
New York tax expert Robert Willens tells Barron's that Zuckerberg faces a 23.8% federal tax bite—20% federal tax on dividend income and a 3.8% Medicare surcharge—plus the top 13.3% state income-tax rate in California.
The trust fund loophole refers to the “stepped-up basis rule” in U.S. tax law. The rule is a tax exemption that lets you use a trust to transfer appreciated assets to the trust's beneficiaries without paying the capital gains tax. Your “basis” in an asset is the price you paid for the asset.
Wealthy family borrows against its assets' growing value and uses the newly available cash to live off or invest in other assets, like rental properties. The family does NOT owe taxes on its asset-leveraged loans because the government doesn't tax borrowed money.
Most of the government's federal income tax revenue comes from the nation's top income earners. In 2021, the top 5% of earners — people with incomes $252,840 and above — collectively paid over $1.4 trillion in income taxes, or about 66% of the national total.
Investment income is the profit earned from investments, such as real estate and stock sales. Dividends from bonds also are investment income. Investment income is taxed at a different rate than earned income.
You generally don't have to pay taxes if your income is less than the standard deduction or the total of your itemized deductions, if you have a certain number of dependents, if you work abroad and are below the required thresholds, or if you're a qualifying non-profit organization.
Inheritances, gifts, cash rebates, alimony payments (for divorce decrees finalized after 2018), child support payments, most healthcare benefits, welfare payments, and money that is reimbursed from qualifying adoptions are deemed nontaxable by the IRS.
18.6 million individual Americans reportedly owed the Internal Revenue Service (IRS) a combined $360 billion in overdue taxes in 2022, according to the IRS. Yahoo Finance Live anchors Akiko Fujita and Rachelle Akuffo break down this data and the reality of US tax debt.
High-Income | Tax Policy Center. Number of nontaxable returns with incomes of $200,000 or more. Itemized deductions, credits, and tax credits as percentage of income for returns with income of $200,000 or more.
Inheritance checks are generally not reported to the IRS unless they involve cash or cash equivalents exceeding $10,000. Banks and financial institutions are required to report such transactions using Form 8300. Most inheritances are paid by regular check, wire transfer, or other means that don't qualify for reporting.
The long-favored grantor-retained annuity trusts (GRATs) can confer big tax savings during recessions. These trusts pay a fixed annuity during the trust term, which is usually two years, and any appreciation of the assets' value is not subject to estate tax.
Many people worry about the estate tax affecting the inheritance they pass along to their children, but it's not a reality most people will face. In 2025, the first $13,990,000 of an estate is exempt from federal estate taxes, up from $13,610,000 in 2024. Estate taxes are based on the size of the estate.
There are 2 primary methods of transferring wealth, either gifting during lifetime or leaving an inheritance at death. Individuals may transfer up to $13.99 million (as of 2025) during their lifetime or at death without incurring any federal gift or estate taxes. This is referred to as your lifetime exemption.
This rule generally prohibits the IRS from levying any assets that you placed into an irrevocable trust because you have relinquished control of them. It is critical to your financial health that you consider the tax and legal obligations associated with trusts before committing your assets to a trust.
One type of trust that helps protect assets is an intentionally defective grantor trust (IDGT). Any assets or funds put into an IDGT aren't taxable to the grantor (owner) for gift, estate, generation-skipping transfer tax, or trust purposes.
Others will object to taxing the wealthy unless they actually use their gains, but many of the wealthiest actually do use their gains through the borrowing loophole: They get rich, borrow against those gains, consume the borrowing, and do not pay any tax.
Depending on your age, filing status, and dependents, for the 2023 tax year, the gross income threshold for filing taxes is between $12,950 and $28,700. If you have self-employment income, you're required to report your income and file taxes if you make $400 or more.