Steve Forbes on looming tax hikes<\/p>\n
IRS Commissioner Charles Rettig told lawmakers on Tuesday that the tax gap may be even larger than the massive estimates that have already been put forward.<\/p>\n
Rettig said during testimony before the Senate Finance Committee that the gross tax gap for tax years 2011 to 2013 is estimated at $441 billion.<\/p>\n
However, he noted that calculations don’t take into account several factors, including information with respect to virtual currencies, foreign-sourced income or illegally-sourced income, which is still taxable.<\/p>\n
Rettig added that a recent National Bureau of Economic Research report found that the top1% of taxpayers by income account for an additional $175 billion worth of unpaid obligations per year based on an analysis focused on pass-through entities and offshore income.<\/p>\n
"If you aggregate the points that I’m talking about and you look at the fact that there’s a current estimate by folks on the outside that the tax gap is $7.5 trillion over the next 10 years, and you add in the component pieces that I referenced – there are more, I’ve just referenced the ones that are most highly visible at this point … it would not be outlandish to believe that the actual tax gap could approach, and possibly exceed, $1T per year," Rettig said.<\/p>\n
1% FRIENDLY SALT CAP REPEAL IS 'PART OF THE DISCUSSION' ON BIDEN'S $2.2T SPENDING BILL, PSAKI SAYS<\/strong><\/p>\n When asked who pays the price when wealthy taxpayers evade their obligations, the IRS commissioner said the costs are borne by taxpayers who are following the law.<\/p>\n To see a meaningful reduction in the tax gap, Rettig said the IRS needs a multi-faceted approach, including resources to hire enforcement personnel and modernize its systems. It could also benefit from more information reporting.<\/p>\n GET FOX BUSINESS ON THE GO BY CLICKING HERE<\/u><\/strong><\/p>\n The IRS has been combating both a decline in staffing and a decline in resources. In the collection group alone there was a 19% decline in workers between fiscal 2013 and fiscal 2018. It has lost half of its revenue offices, the agency said, and about one-third of its total workforce over the past decade.<\/p>\n Over the same time period, the agency has lost 17,000 enforcement personnel, Rettig added.<\/p>\n Funding as of fiscal 2018 was $11.4 billion, down from $12.15 billion in 2010.<\/p>\n