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The cost of tax fraud is $ 1 trillion a year, according to the IRS

The head of the IRS estimates that tax evasion in the United States could reach $ 1 trillion a year, which is several times more than previous estimates by the federal government.

Home Revenue Commissioner Chuck Ratig told the Senate on Tuesday that the previous increase in tax gaps in 2013 It totaled about $ 441 billion over three years, not including some tax evasion methods that were not on the radar at the time.

According to him, the new assessments include the use of cryptocurrency. “Avoiding offshore taxes, illicit proceeds that are ignored by the IRS և undercutting business reports – also contributes to a larger than previously known tax gap,” Retig said.

“I do not think it is strange to believe that the actual tax gap could be close to $ 1 trillion a year,” Retig told the Senate Finance Committee.

Debt Tax Duties և The bubble difference in taxes actually levied by the IRS is in the spotlight on Capitol Hill, where more and more lawmakers are coming to see more aggressive tax evasion as a way to boost government revenue.

Concentration of performance

President Biden has proposed stepping up corporate tax enforcement as part of his $ 2.25 trillion proposal to pay for infrastructure spending. He intends to outline individual tax proposals in the coming weeks. Biden’s budget proposal last week also called for an additional $ 900 million for extended audits.

Retig said $ 1 billion in enforcement could enable the IRS to hire 4,875 front-line auditors to upgrade computer systems to avoid tax evasion. He said rebuilding the agency’s audit capacity would be a multi-year process after the IRS lost 17,000 enforcement employees over the past decade.

“We want to get there, but we need your help,” Retig said.

Strengthening tax reporting requirements ուժեղ tightening controls on tax fillers will help the IRS stop fraud և bridging the tax gap, Retig said. About 99% of taxes are paid to the IRS when there is automatic retention և reporting to the agency, but only 45% of debts are paid when they are absent, he said.

Wealthy evaders

Many individuals earn their income through wages, where taxes are automatically deducted from each salary. However, income from passers-by, such as partnerships and limited liability companies, is not subject to automatic withholding, giving homeowners more opportunity to reduce their tax liabilities.

A study published last month involving two IRS officials found that the richest 1% of Americans do not report 20% of their income to the IRS. The study found that these individuals were able to use transitional businesses and offshore structures to protect their income from the IRS. The study found that raising that amount would boost tax collection by $ 175 billion a year.


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