Taxpayer Compliance:

Reducing the Income Tax Gap

T-GGD-95-176: Published: Jun 6, 1995. Publicly Released: Jun 6, 1995.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO discussed the income tax gap. GAO noted that: (1) taxpayers voluntarily pay 83 percent of the taxes they owe and 87 percent after Internal Revenue Service (IRS) audits; (2) although the compliance level is relatively high, tax compliance is not uniform among groups of taxpayers; (3) IRS estimates that wage earners report 97 percent of their wages, self-employed report 36 percent of their income, and self-employed individuals who operate on a cash basis report 11 percent of their income; (4) compliance is highest where there is tax withholding, slightly lower where there is information reporting to IRS, and much lower where there is neither; (5) the complexity of tax rules influences the level of tax compliance; (6) collection of some of the tax gap may not be feasible because of unreasonable costs or recordkeeping requirements; and (7) IRS must measure compliance with the tax law and use such information to focus its resources effectively.

Sep 13, 2016

Sep 6, 2016

Jul 29, 2016

Jul 7, 2016

Jun 27, 2016

Jun 23, 2016

Apr 19, 2016

Apr 13, 2016

Apr 7, 2016

Mar 28, 2016

Looking for more? Browse all our products here