How Biden Plans to Crack Down on Wealthy Tax Cheats

"This revenue is backloaded in the 10-year budget window as several of these new investments — such as hiring revenue agents capable of complex global high-net-worth examinations and building the technological infrastructure to support a new information reporting regime — take years to reach their full potential," according to the report. "The revenue raised in the second decade amounts to $1.6 trillion."

Biden's compliance agenda, as explained by Treasury in its report, includes four elements:

1. Give the IRS nearly $80 billion over the next decade to address sophisticated tax evasion.

The IRS would grow no more than around 10% annually but would also have funding in place to make investments with large fixed costs — like modernizing information technology, improving data analytic approaches, and hiring and training agents dedicated to complex enforcement activities.

2. Provide the IRS with more complete information.

When the IRS can verify taxpayer filings with third-party information reports, such as the W-2 forms submitted by employers to report wages, compliance rates exceed 95%. Without third-party reporting, compliance rates fall below 50%.

3. Overhaul the IRS' 1960s-era technology.

The IRS still relies on Individual and Business File Systems that date back to the 1960s — the oldest in the federal government. These resources would also support efforts to meet threats to the security of the tax system, like the 1.4 billion cyberattacks the IRS experiences annually.

4. Regulate paid tax preparers and increase penalties for those who commit or abet evasion.

Taxpayers often make use of unregulated preparers who lack the training to provide accurate tax assistance, according to Treasury. These preparers submit more returns than all other preparers combined, and taxpayers rely on their guidance, in part because of challenges in reaching the IRS in a timely manner when questions arise.