Taxpayers stiffed Uncle Sam $450 billion just 6 years ago, and the IRS is aiming to stop it.
The IRS announced that Americans underpaid their taxes by that massive figure in 2006, with the nation’s noncompliance rate for paying taxes at 17%. Under reporting income by people and corporations was the biggest reason. And after the IRS waged its enforcement and collection efforts, the 2006 tax gap ultimately stood at $385 billion.
To reverse this, the IRS announced it will to crack down on shady tax return preparers. At the same time, it wants to see more third party reporting of information. Wages and salaries reported by employers – not employees – had a small rate of erroneous reporting at just 1 percent.
The IRS makes these tax gap reports every five years, and compared to 2001, the compliance rate was essentially unchanged. People are trying to report less of their income, and the IRS is sure to take on new and more aggressive ways to prevent it. Washington politicians typically want to see the IRS collect more money rather than raise taxes or cut spending.
So for those who owe back tax debt to the IRS, chances are the IRS will be giving you a second glance and will try to get you to pay up. But owing back tax debt to the IRS can be resolved fairly if you hire a tax attorney. A tax attorney knows the tax laws and the IRS’ rules and regulations, and can help you avoid a wage garnishment or bank levy.
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