While the Internal Revenue Service is trying to close the gap between
what taxes are owed and what actually comes in, it has not established
long-term, quantitative compliance goals and regularly collected data
to track its progress,” the Government Accountability Office has said.
The tax gap in 2001 – between $312 billion and $353 billion – results
mainly from underreporting, with underpayments and non-filing comprising
about $60 billion of the total, according to the IRS.
While the agency has collected recent compliance data, it says some of the
methodologies it uses to estimate the gap, are outdated, though according
to its report, GAO-05-753, the agency “is taking laudable steps intended to
improve the estimate, which it plans to revise by the end of 2005.”
The IRS also has developed a proposed schedule for compliance studies,
but again, has yet to approve plans to periodically measure compliance
for the tax gap components, said GAO.
It said long-term, quantitative compliance goals together with updated
compliance data could “provide a solid base upon which to develop a more
strategic, results-oriented approach to reducing the tax gap.”
The agency evidently does not believe more face-to-face taxpayer assistance
is an option. It was moving forward with plans to close 68 out of 400
assistance centers until Congress put that on hold pending a report by
the Treasury Inspector General for Tax Administration on the likely
impact of the planned closures.
