United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2006-07-26 monographic deposited born digital 24 p. GA 1.13:GAO-06-1000T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-06-1000T P0b002ee1803997af f:d061000t DGPO 2010-08-12 2011-03-28 GAOREPORTS-GAO-06-1000T machine generated eng fdlp REPORT GAOREPORTS-GAO-06-1000T GAO-06-1000T Delinquent taxes Financial analysis Fiscal policies Future budget projections Income taxes Noncompliance Policy evaluation Strategic planning Tax administration Tax nonpayment Tax returns Tax violations Taxpayers Underpayments Tax gap Testimony A57483 The tax gap--the difference between the tax amounts taxpayers pay voluntarily and on time and what they should pay under the law--has been a long-standing problem in spite of many efforts to reduce it. Most recently, the Internal Revenue Service (IRS) estimated a gross tax gap for tax year 2001 of $345 billion and estimated it would recover $55 billion of this gap, resulting in a net tax gap of $290 billion. When some taxpayers fail to comply, the burden of funding the nation's commitments falls more heavily on compliant taxpayers. Reducing the tax gap would help improve the nation's fiscal stability. For example, each 1 percent reduction in the net tax gap would likely yield $3 billion annually. GAO was asked to discuss the tax gap and various approaches to reduce it. This testimony discusses to what extent the tax gap could be reduced through three approaches--simplifying or reforming the tax system, providing IRS with additional enforcement tools, and devoting additional resources to enforcement--as well as various factors that could guide decision-making when devising a strategy to reduce the tax gap. This statement is based on prior GAO work. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-06-1000T/html/GAOREPORTS-GAO-06-1000T.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-06-1000T/pdf/GAOREPORTS-GAO-06-1000T.pdf GAO-06-1000T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-06-1000T Testimony GAO-06-1000T; Tax Compliance: Opportunities Exist to Reduce the Tax Gap Using a Variety of Approaches; Delinquent taxes Financial analysis Fiscal policies Future budget projections Income taxes Noncompliance Policy evaluation Strategic planning Tax administration Tax nonpayment Tax returns Tax violations Taxpayers Underpayments Tax gap Volume 88 Page 299 88 Stat. 299 Public Law 93-344 Public Law 105-34 Public Law 108-357