IRS Sees $300 Billion Gap

[Up2Late]

(I guess they don't have enough investigators to "Investigate" Corporations)

Tue Mar 29, 2005 11:42 AM ET

WASHINGTON (Reuters) - The difference between what U.S. taxpayers owe the U.S. government and what they actually pay on time totals more than $300 billion a year, the Internal Revenue Service said on Tuesday.

A research project at the federal tax agency found that the U.S. tax gap ranged from $312 billion to $353 billion in tax year 2001, compared with an earlier estimate of $311 billion. The project assessed individual, not corporate, taxes. IRS enforcement activities helped recover about $55 billion of that total gap, leaving a net tax gap of $257 billion to $298 billion, the IRS said. That yields a noncompliance rate of 15 percent to 16.6 percent, according to the IRS.

"Even after IRS enforcement efforts and late payments, the government is being shortchanged by over a quarter-trillion dollars by those who pay less than their fair share," said Mark Everson, IRS commissioner. "People who aren't paying their taxes shift the burden to the rest of us." The tax gap findings come from a three-year National Research Program study, which audited 46,000 individual income tax returns for 2001. The preliminary results yielded a tax gap range that will then be refined into a final estimate by the end of this year.

The tax gap includes three components -- underreporting income, underpayment of taxes and failure to file tax returns. The study found a modest deterioration in tax compliance among individual taxpayers since the last study in 1988. Individual income tax was the single largest source of the tax gap, accounting for two-thirds of the total, the IRS said.

(more at link)

<http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8025691&src=rss/businessNews>

[meganmonkey]

1. I would LOVE to see what the 'gap' is for corporations....

Hmmm....maybe someday they'll release that report too.

[xchrom]

8. them? they pat them on the back

and take them to lunch.
i forget -- but an obscene number of corps. pay no taxes.
how american is that?

[mbperrin]

12. Check out page 3 of this document.

http://www.ctj.org/corpfed04an.pdf

A huge number of corporations pay no tax and some receive tax rebates in the billions as well!

Surprised? Me, neither.

[booksenkatz]

2. So the solution is to go after

a senior citizen who supplements his social security by selling Pat Boone 45's at ebay. Right. Whatevah. They scrabble after pennies from individuals, while corporations get by with skillions of dollars of unpaid taxes.

[ClintonTyree]

4. Like me................

they're after me right now for not paying enough tax on a retirement annuity in 2002. You see, that made my Social Security "taxable" for that year. I'm screwed. They say I owe about $38,000 with penalties and interest. I have someone working on it, trying to get an offer in compromise, but I'm convinced they'll take everything I have.
Yep, let's concentrate on the disabled guy getting Social Security. That'll fatten up the coffers.

[Massachusetts]

5. "trying to get an offer in compromise",

Good luck, these SOB's have no mercy...I'm speaking with experience.

[salin]

9. Sorry to hear this

for several years there haved been news items about how much more likely (percentage wise) the irs under bush was likely to go after moderate and lower moderate income folks with audits than after high income folks (you know the ones with accountants who do all sorts of fancy accounting, sheltering, etc.)

Good luck to you.

[meganmonkey]

10. I wish you the best, Clinton

I'm sorry to hear about that.

:grr:

[JNelson6563]

15. Penny wise and dollar foolish

That's what it's called. :toast:

[earth mom]

25. Exactly-go after the little guy cause he ain't allowed to have

shit! :grr:

Meanwhile, watch out for new "legislation" ala * & Co that tars and feathers any middle class or poor person who is in in trouble with the IRS. No doubt debtor prisons are coming! :grr: :grr: :grr:

[Ezlivin]

3. If corporations were taxed PROPERLY...

...we would not have a "gap".

And we would have universal health care and better education.

Conservatives bitch about "welfare cheats" and then allow their corporate cronies to cheat the hell out of us.

[Massachusetts]

6. Key word "If"

The middle class is slowly GOING the way of the Do Do bird, thanks in part to our lop sided tax system.

The wealthy individuals and corporations OWN OUR country, the middle class is here to CARRY the water and PICK UP THE MESS after the elite and wealthy have screwed up.:mad:

[sandnsea]

7. counter-sue

How much money is due the treasury (taxpayer) from waste and fraud?

[indepat]

11. Every person and corporation receiving large tax breaks are not paying

their fair share.

[FreedomSpirit]

13. Have a look at

http://www.861.info/ for some interesting historical information about the U.S. Income Tax System

[Carolab]

19. The 861 law.

I felt it was worth cut and paste here because I keep trying to explain that income tax is UNCONSTITUTIONAL. We are paying off interest on private loans from the Federal Reserve, on which the few families and banking institutions/trusts who OWN the Fed are getting rich.

<snip>

...Subchapter N, Section 861 of the correctly written federal income tax law that PROVES that most Americans (those who have income only from inside the 50 states) do NOT owe federal income taxes and never have.

Generations of government lawyers in the Treasury Department (regulations) and Office of Law Revision Counsel (statutes codified in the USC) deliberately wrote and arranged the first part of the law to give the impression that the income tax is a direct tax on incomes and that all incomes were taxed, but without actually stating so. This was done to DECEIVE the average reader into sending in money that in most cases was NOT owed by law.

But since the law is and must be constitutional, the TRUTH that the income tax is an indirect tax imposed only on those engaged in international commerce was buried thousands of pages away deep in the REGULATIONS under Section 861. This part of the law proves that the only time that income is taxable is if the commerce that generates it crosses country borders (making it part of international commerce). .

Most Americans receive only income from domestic commerce (transactions that occur within and among the 50 states). Such incomes are NOT shown to be taxable; they are MISSING from the critical parts of the law that show WHEN income is taxable (26 CFR 1.861-8 and following). The only time that domestic income is taxable is if it is received by FOREIGNERS.

The evidence in the law is irrefutable; most Americans have been systematically ROBBED by "their" government; particularly the Treasury Department, who knew and have always known what the law shows. We call this "THEFT BY DECEPTION" (of what the law says). The public will end this FRAUD because the written law does NOT LIE and the evidence in over 80 years of the law will NOT go away.

You will see opinions of attorneys, accountants and many others who agree with the overwhelming evidence of the fraud and become aware of many other deliberate deceptions of the federal government as well as what lies ahead for America once this massive FRAUD has ended.

<snip>

[ohtransplant]

21. This has been tried over and over

and the courts always find these argument to be specious. They've even started to fine people for making frivolous arguments. Attempt this at your peril. Just sayin...

[Carolab]

22. I know. It needs a mass movement behind it. People who do it alone are

punished, even while a huge number of people in this nation are left alone for not reporting their taxes and paying them at all!

There needs to be a united, national strike against taxes...that's why people keep alluding to the "tea party"...

[Zynx]

14. IRS Enforcement is a joke - no wonder they're short.

[Up2Late]

16. One of the biggest problems (I personally think it's deliberate) is...

...that the Congress keeps cutting the IRS Budget, so they have fewer and fewer auditors, and the Fat Cats know that.

Then, they keep making the Tax Code More and More complicated and with fewer auditors, it gets less and less likely that they are going to audit the bigger, more complicated tax returns, do to work loads. So what do they do, they go after the smaller, less complicated returns.

It's just another Repuke Lie (simplifying the Tax code).:mad:

[napi21]

17. You can fault the IRS to some degree, but the major fault lies in

the House and Senate! You know all the stories about the IRS Code is 40,000+ pages? IT IS! And most of it is special tax breaks that apply to only one or two corps, or to specific segments of the economy.

You can't even blame the Bush congress becasue this has been going on for many many years!

I would LOVE to see them scrap the entire tax code. Eliminate all exemptions for individuals and corps. Then take a blank sheet of paper and start from scratch. Maybe a personal exemption for dependants, and that's it! The rates should be able to be lowered to something reasonable for everyone, but the game playing would be GONE!

Unfortunately, that's never going to happen.

[Up2Late]

20. They practically did that, back in the late 1980's,

But whenever the Repukes had a majority in the House, they started adding the Tax loop holes (oh, sorry, they call them Tax Cuts) right back into the tax code.

I've used Computer Tax software since 1992, and have had to buy a new version every year, because it's changed a little every year since then. It's really picked up speed in the last few years.

I don't know when they did the same sort of thing before that, but I think that's something that has to be done every 20 years or so.:hurts:

Kind of like adjusting Social Security or raising the Minimum Wage. :think: :sarcasm:

[lovuian]

18. The reason they are losing money is due to the underground

economy!!! If you don't think its out there it is!!!

America is loosing tons of money from workers here from other countries getting paid cash

They pay no taxes!!! Bush open the borders and the doors but these people know how to work the underground!!! Its a economy in itself!!!

Plus the Corporations don't pay any benefits and get tax breaks!!!

if Bush thinks he's going to get money out of the poor let him try
i can see Debtor prisons increasing more and more and more!!!

[struggle4progress]

23. Gingrich era Repubs passed law limiting IRS audit/enforcement powers

[Psephos]

24. Thank bejeebus they did; the IRS was brutal, haughty, and abusive

At least those pukes got one thing right.

I remember reading the horror stories. Promotion within the IRS was based on how much $$ field investigators could generate, fairness be damned. A lot of innocent people were steam-rollered.

The IRS lives or dies not by the depth of its enforcement, but by the voluntary compliance of the taxpayers. That compliance depends upon basic respect for the IRS and the taxation system. Once that confidence and respect is gone, you have something like Russia had for the first half-dozen years after the collapse of the USSR. Everyone cheated, no one paid.

Having weak enforcement is bad for IRS respect, having draconian enforcement is bad for IRS respect. As usual, the best compromise is somewhere in the middle.

Peace.

[struggle4progress]

26. The horror stories were, of course, the usual wingnut baloney.