Roth CPA has some interesting observations from the IRS convention in the States:
Mark Matthews, IRS deputy commissioner for services and enforecment, had a sharp observation on efforts to close the “tax gap,” the difference between the amount of taxes imposed in theory and the amount collected:
Matthews acknowledged that the IRS will also have to get better at using the data it already has, but said that with significant help on the funding side and some legislative improvements, $50 billion to $100 billion could be shaved from the $345 billion tax gap.
“We’ll never get it to zero. We’ll never get close to zero,” he said. “You wouldn’t want to live in a country where it was close to zero”.
A study released later in the day by three researchers, among them the IRS’s Edward Emblom, asserted in its preliminary results that increased audits can have a significant effect on compliance for all taxpayers.
According to the study, doubling the audit rate from 1 percent to 2 percent on businesses with incomes between $25,000 and $100,000 reduces noncompliance by 7 percent, while doubling the audit rate for larger businesses had similar but less pronounced results.