Friday, October 4, 2019
Wall Street Journal, U.S. Tax Compliance Holds Flat at 86%:
Americans pay about 86% of their federal taxes, leaving a $381 billion annual gap between taxes owed and taxes collected, according to an Internal Revenue Service study released Thursday.
The government’s first report on the “tax gap” since 2016 shows tax compliance holding steady as the IRS shrinks. However, the study covers tax years 2011 through 2013, and the IRS has reduced audits and staffing considerably since then.
In those years, taxpayers paid 83.6% of the taxes they owed voluntarily and a total of 85.8% after IRS enforcement efforts. Those are about equal to the previous study, which covered tax years 2008 through 2010 and was updated with the same methodology used for the new analysis.
“Voluntary compliance is the bedrock of our tax system, and it’s important it is holding steady,” Charles Rettig, the IRS commissioner, said in a statement.