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Tax Compliance: Multiple Approaches Are Needed to Reduce the Tax Gap
Michael Brostek (au)
The tax gap -- the difference between the tax amounts taxpayers pay voluntarily & on time & what they should pay under the law -- has been a long-standing problem in spite of many efforts to reduce it. The IRS estimated a gross tax gap for 2001 of $345 billion & est. it would recover $55 billion of this gap, resulting in a net tax gap of $290 billion. The author was asked to discuss the tax gap & various approaches to reduce it, & what the proposed budget for FY 2008 says about it. This testimony discusses the need for taking multiple approaches & to what extent the tax gap could be reduced through 3 approaches -- reforming the tax system, providing IRS with additional enforcement tools, & devoting additional resources to enforcement. Charts & tables.
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