Newsletters

GAO Offers Recommendations To Reduce The Tax Gap

The U.S. Government Accountability Office is offering recommendations to close the tax gap, a move it says could yield large fiscal benefits even if there is only a modest narrowing of the gap between what is paid and what is owed.

In a “snapshot” report issued February 27, 2023, the GAO cited Internal Revenue Service-reported figures for the years 2014-2016 that show taxpayers owed $3.3 trillion in taxes but paid only $2.8 trillion. GAO analysis of IRS data attributes the gap to three key factors: underreporting ($398 billion); underpayment ($59 billion); and nonfiling ($39 billion).

GAO reported a number of factors that have contributed to the tax gap, including limited third-party information reporting, declines in audit rates, worsening customer service and the complexities of the tax code. It also noted that abusive tax shelters also play a role in contributing to the tax gap. The report did not quantify how much these factors contributed to the tax gap.

“Our work shows there are no easy ways to reduce the taxgap,” the report states. “Multiple approaches are needed to address the many causes of tax noncompliance.”

The government watchdog recommends that the IRS re-establish quantitative goals to reduce the tax gap; expand third-party information reporting; digitize taxpayer returns to make them more readily available to enforcement programs; and make it easier for individuals to report preparers and promoters involved in abusive tax schemes.

It also is recommending that Congress give the IRS explicit authority to establish professional requirements for paid preparers; expand third-party reporting requirements related to real estate; expand IRS authority to correct errors and discrepancies between taxpayer reported and other government collected information; and requiring paper returns include a scannable code to allow information to be processed digitally.

The GAO did not quantify how much benefit the federal government could get with even a modest reduction in the tax gap.

FL - Taxpayer did not qualify as private trust

The Florida Department of Revenue (department) determined that a taxpayer was not a private trust excluded from the definition of […]

Read More
FL - Taxpayer did not qualify as private trust

FL - Governor proposes tax cuts in state of the state address

In his State of the State Address, Florida Gov. Ron DeSantis proposed $1.1 billion in tax cuts, the continuation of […]

Read More
FL - Governor proposes tax cuts in state of the state address

FinCEN Commences Beneficial Ownership Reporting Under Bipartisan Corporate Transparency Act

The Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), has begun accepting beneficial ownership information report under the bipartisan Corporate Transparency Act, enacted in 2021. This effort requires companies doing […]

Read More
FinCEN Commences Beneficial Ownership Reporting Under Bipartisan Corporate Transparency Act

Employee Benefit Plan Filing Extension Procedures Updated

Starting in 2024, Form 5558 is no longer used to request an extension of time to file Form 5330, Return of Excise […]

Read More
Employee Benefit Plan Filing Extension Procedures Updated

More Than 1,000 Projects Registered Through IRS ECO Tool, IR-2024-14

The Internal Revenue Service said that more than 1,000 projects have been registered through the agency’s Energy Credits Online tool. The tool was created to help taxpayers who are taking […]

Read More
More Than 1,000 Projects Registered Through IRS ECO Tool, IR-2024-14

IRS Encourages Taxpayers to Get Ready for 2024 Filing Season, IR-2024-1

The IRS has encouraged taxpayers to utilize tips, tools and other resources available on the IRS website to Get Ready for 2024 filing season. The agency is set to announce the start […]

Read More
IRS Encourages Taxpayers to Get Ready for 2024 Filing Season, IR-2024-1

Transitional Guidance on Reporting of Information on Receipt of Digital Assets Announced, Announcement 2024-4, IR-2024-12

The IRS has provided transitional guidance under Code Sec. 6050I with respect to reporting transactions involving receipt of digital assets. The Service has further clarified that at this time, digital assets are not required […]

Read More
Transitional Guidance on Reporting of Information on Receipt of Digital Assets Announced, Announcement 2024-4, IR-2024-12

IRS Updates List of Qualified Census Tracts for Qualified Mortgage Bonds and Mortgage Credit Certificates, Rev. Proc. 2024-08

The IRS has provided issuers of qualified mortgage bonds and issuers of mortgage credit certificates with an updated list of qualified census tracts for each state, the District of Columbia and Puerto Rico. […]

Read More
IRS Updates List of Qualified Census Tracts for Qualified Mortgage Bonds and Mortgage Credit Certificates, Rev. Proc. 2024-08

IRS Announces Leadership Restructuring, IR-2023-237

The IRS Commissioner, Danny Werfel, has announced plans for new leadership structure to align with transformation goals. The updated chart, the first in two […]

Read More
IRS Announces Leadership Restructuring, IR-2023-237

IRS: Taxpayers and Tax Professionals Should Protect Themselves from Scams, IR-2023-223, IR-2023-224, IR-2023-226, IR-2023-227, IR-2023-229

As the National Tax Security Awareness Week concludes, the IRS emphasized on the ongoing need for taxpayers and tax professionals to stay […]

Read More
IRS: Taxpayers and Tax Professionals Should Protect Themselves from Scams, IR-2023-223, IR-2023-224, IR-2023-226, IR-2023-227, IR-2023-229