Money Laundering Forms Could Be Used to Detect Nonfilers
T-GGD-92-56, Jun 23, 1992
GAO discussed the Internal Revenue Service's (IRS) efforts to use large cash payment reports (Form 8300) in its enforcement programs to identify persons that have not filed tax returns or reported all of their income. GAO noted that: (1) over one-third of the forms filed either had no tax identification number or an incorrect number; (2) IRS is developing an automated method to allow businesses to validate purchasers' identification numbers before they leave the business; (3) applying this tool to Form 8300 transaction should increase the number of correct identification numbers reported on the forms; (4) IRS inadvertently eliminated the Form 8300 from the nonfiler match for tax years 1989 and 1990; and (5) Form 8300 can be useful in identifying nonfilers and taxpayers that underreport their income. GAO also found that IRS corrected the mistake and will begin using the forms to identify nonfilers for tax year 1991.