What TIGTA found
In February 2024 the IRS launched a high-income nonfiler notice initiative. More than a year later, TIGTA found 38,824 high-priority cases involving 33,653 taxpayers still sitting in first-notice status, which stopped further notices and collection action. TIGTA estimated that releasing them could secure returns or assessments on 10,482 cases, about $321.3 million in additional tax.
The IRS told TIGTA it moved those cases out of first-notice status in March 2026. Another 10,969 high-priority cases were waiting unworked in the collection queue as of June 30, 2025.
TIGTA also found that 4,918 first notices went to 4,748 taxpayers who had already filed, and that the Inflation Reduction Act funding behind the notice program was exhausted as of December 31, 2025. The IRS agreed to all six recommendations, including an agencywide nonfiler strategy with executive oversight.
What it means for your clients
- Second notices are coming. Clients who received a first notice and heard nothing more were not off the hook. Their cases were paused, and the pause has ended.
- Filing first is still the better position. A client who files before the IRS prepares a substitute return keeps their deductions, filing status, and credits in the calculation.
- Some notices are wrong. Nearly 5,000 taxpayers got a notice after they had already filed. A transcript pull shows whether the return posted before anyone panics.
Next Step services that fit
- Back Tax Returns — Personal and Business. Unfiled years prepared and filed before the IRS fills the gap itself.
- Rebuild Missing Business Records. For self-employed nonfilers with no books, the step that makes the return possible.
- Fix an IRS-Prepared or Incorrect Return. When a substitute return was already assessed, replace it with an accurate one.
- IRS Letter Response. Notices sent in error answered with proof that the return was filed.
Source: Treasury Inspector General for Tax Administration, Agencywide Coordination Could Enhance the IRS’s Approach to Nonfilers, Report No. 2026-308-047. Reports are available at tigta.gov.
This summary is for tax professionals and is general information, not tax or legal advice for a specific situation. Figures are as reported by TIGTA. Results for any client depend on their facts, documentation, and IRS discretion.