No Further Funding Cuts For IRS In FY24
Other than a planned repurposing of Inflation Reduction Act supplemental funding, the Internal Revenue Service saw no other cuts as the President signed off on the resolution […]
Read MoreThe Internal Revenue Service is estimating the tax gap on tax years 2014-2016 to be $496 billion, an increase of more than $58 billion from the prior estimate.
“The increase in the tax gap estimates reflects that the IRS needs to do more, both in improving taxpayer service as well as working to improve tax compliance,” IRS Commissioner Charles Rettig said in a statement, adding that the recent funding in the Inflation Reduction Act “will help the IRS in many ways, increasing taxpayer education, significantly improving services to all taxpayers and focusing on high-income/high-wealth non-compliance in a fair and impartial manner supporting compliant taxpayers.”
IRS published a report on the new estimate on October 28, 2022.
According to the report, the estimated net compliance rate is 87 percent, defined as tax paid voluntarily and timely plus enforced and other late payments divided by the total true tax. The voluntary compliance rate, which is the amount of tax paid voluntarily and timely divided by the total true tax is estimated to be 85.0 percent.
The tax gap includes three components, including:
The report estimates that $68 billion of the tax gap will eventually be paid.
The IRS also reported that the tax gap for years 2017-2019 is projected to increase to $540 billion.
Other than a planned repurposing of Inflation Reduction Act supplemental funding, the Internal Revenue Service saw no other cuts as the President signed off on the resolution […]
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