NEW YORK (CNNMoney.com) -- The $290-billion tax gap is getting a lot of attention as a magical windfall for government budget woes. The problem: Getting the amount owed in taxes each year but not collected isn't so easy.
From IRS Commissioner Mark Everson's perspective, you've got to start somewhere. At a House subcommittee hearing on Tuesday, Everson characterized the Bush administration's 16 proposals to narrow the gap as "an important start."
The 16 proposals, which are included in the president's fiscal year 2008 budget, have been criticized as insufficient and lacking "energy," since they're estimated to raise tax revenue by $2.9 billion a year, or just 1 percent of the estimated gap.
From IRS Commissioner Mark Everson's perspective, you've got to start somewhere. At a House subcommittee hearing on Tuesday, Everson characterized the Bush administration's 16 proposals to narrow the gap as "an important start."
The 16 proposals, which are included in the president's fiscal year 2008 budget, have been criticized as insufficient and lacking "energy," since they're estimated to raise tax revenue by $2.9 billion a year, or just 1 percent of the estimated gap.
Everson singled out some of Bush's proposals that he thought especially critical to implement. Among them:
Require banks to report merchants' annual credit card reimbursements.
Boost reporting on investments by brokerages and other third parties.
Make willful failure to file a tax return repeatedly a felony instead of a misdemeanor.
Underreporting of income accounts for 80 percent of the tax gap, of which half is due to underreporting of net business income by individuals. Another 18 percent of the gap is due to failure to file among other things.
"Where there's third-party reporting and withholding you get much better compliance," Everson said.
More on the story.
2 comments:
When you have so many people unemployed in this country or wages staying stagnant, this also contributes to this problem.
Also people who owe taxes because they cashed in the IRA's etc to live off because of long unemployment and can't afford to pay the taxes at year's end because they are still not employed or can't afford to because of being unemployed for so long, or taking a lower paying job.
And many people have used all the equity in their homes as their lifestyles. That is why subprime loan are on the rise and foreclosures are on the rise... People's lifestyles can't keep up with the cost of inflation.
Post a Comment