IRS Chief Says $1 Trillion in Taxes May Go Uncollected Each Year
By John McCormick
As much as $1 trillion a year in federal taxes may be going
unpaid because of errors, fraud and lack of resources to enforce
collections adequately, Internal Revenue Service commissioner
Charles Rettig, told lawmakers Tuesday.
During a nearly three-hour appearance before the Senate Finance
Committee, Mr. Rettig said much has changed since the IRS last
formally published data on the so-called tax gap -- the difference
between taxes owed and tax collected -- using returns from tax
years 2011 to 2013. That reporting, to be updated next year, showed
annual losses of $441 billion.
The growth of cryptocurrencies and foreign-source income, as
well as outside estimates that suggest a tax gap of $7.5 trillion
over the next decade, mean past IRS research has almost certainly
undercounted the losses.
"It would not be outlandish to believe that the actual tax gap
could approach, and possibly exceed, $1 trillion per year," Mr.
Sen. Ron Wyden (D., Ore.), the committee's chairman, called that
"a jaw dropping figure" as he pushed for additional funding for the
agency for audits and other enforcement. President Biden's budget
proposal calls for a roughly 10% increase for the IRS.
"I thank you for delivering this important wake up call to this
committee about the enormity of the cheating that is taking place
in America with respect to taxes," Mr. Wyden said.
"The IRS needs more highly skilled investigators and better
technology to keep up with the modern crooks," Mr. Wyden said. "The
Biden administration's new budget proposal calls for a 10% increase
in IRS funding. That's a good start."
Sen. Mike Crapo of Idaho, the committee's top Republican, agreed
that more needs to be done to boost collections. "If there are
those who are cheating on their taxes and causing us to have such a
large tax gap, which I don't doubt, we should address that," he
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(END) Dow Jones Newswires
April 13, 2021 14:31 ET (18:31 GMT)
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