Close the compliance gap
IRS Oversight Board
Wall $treet Week with FORTUNE's April 8, 2005 program includes a segment on
tax cheats, and chances are, you know at least a few of them.
A 2003 survey conducted for the IRS Oversight Board indicates that 20
percent of Americans believe it's okay to cheat on taxes. Congressional
auditors found that almost two-thirds of all U.S. corporations paid no taxes
at all from 1996 to 2000. Experts estimate the annual "tax gap" -- the
difference between total taxes owed and what is actually collected by the
federal government -- at $311 billion. In fiscal 2004, that would have
covered three-quarters of the federal budget deficit. Or all of the outlays
for Medicare and veterans' health. Or simply 14 percent of the entire
federal budget.
The amount of uncollected revenue could be underestimated. Testifying at
hearing last year, IRS Commissioner Mark Everson said that tax gap
projections are based on 1988 data -- then the IRS finishes its current
research, the real shortfall probably will be higher...
....According to the Transactional Records Access Clearinghouse (TRAC),
"major IRS programs to enforce the tax laws against businesses and
corporations are continuing to decline." For example, it also found that
audits for business taxpayers were down. Five years ago, three out of every
1,000 returns were audited; in fiscal 2003 that rate dropped to two out of
every 1,000 business tax returns. The decline in face-to-face audits for all
corporations was steeper: 15 audits per 1,000 returns in FY1999; seven per
1,000 in FY2003. The audit rate for "pass-through entities" also fell; 4.5
audits per 1,000 in 1999; 3.2 per 1,000 in 2003...
http://www.pbs.org/wsw/tvprogram/taxgap040805.html
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