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Tax Gap: Many Actions Taken, But a Cohesive Compliance Strategy Needed

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Report Type Reports and Testimonies
Report Date May 11, 1994
Report No. GGD-94-123
Subject
Summary:

Despite new compliance tools provided by Congress, the gross "tax gap"--the difference between what corporations and individuals owe and what they voluntarily pay--has continued to grow, from $76 billion in 1981 to $127 billion in 1992. The Internal Revenue Service (IRS) further estimates that its enforcement programs failed to collect about three-quarters of the gross tax gap. Such annual tax losses intensify pressures in funding necessary programs. This report analyzes the composition of the tax gap, congressional and IRS prior efforts to reduce the tax gap, IRS' ongoing and planned efforts to improve compliance, and what more could be done to close the tax gap.

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