Implicit support for continuation of the first-time homebuyer credit?
One toke over the IRS-approved medical tax deduction line

IRS not bringing in as much tax money

Every taxpayer thinks they're sending way too much money to Uncle Sam, but a tax oversight office says the IRS actually is bringing in less money than before.

Uncle sam hat with money2 In its annual statistical analysis, the Treasury Inspector General for Tax Administration (TIGTA) found that gross tax collections declined by $400 billion, from $2.75 trillion in fiscal year 2008 to $2.35 trillion in fiscal 2009.

That's a 15 percent drop and the the first decrease in total revenue since a two-year decline from fiscal years 2001 through 2003.

Part of the decline, acknowledges TIGTA, can be blamed on the recent economic downturn. 

A growing number of taxpayers also now face complex tax issues, which increases the difficulty of and adds to the slowness of examining these returns.

And, of course, the IRS was faced (as always) with implementing new tax laws.

But TIGTA also found issues with IRS collections on delinquent accounts. The agency brought in fewer dollars from overdue taxpayers in fiscal year 2009, while at the same time the gross accounts receivable rose and more delinquent taxpayer accounts were placed in a holding file.

More info means more money: While TIGTA did not make any formal recommendations for ways that the IRS could improve its collections rate, the oversight office did cite one method that's come under recent fire in another area: increased information reporting requirements.

Such added third-party reporting is part of the health care reform law and is being opposed by small businesses and their advocates as too burdensome.

TIGTA,though, thinks that more reporting generally is a good thing when it comes to getting more money into the Treasury.

"One proposal, to add information reporting requirements, is a proven method for increasing compliance," notes TIGTA in the report. "While outside stakeholder groups have expressed concern about the increased burden of additional information reporting requirements, 66 percent of taxpayers surveyed cited information reporting as a factor for reporting and paying taxes honestly."

Related posts:

Want to tell your friends about this blog post? Click the Tweet This or Digg This buttons below or use the Share This icon to spread the word via e-mail, Facebook and other popular applications. Thanks!


Feed You can follow this conversation by subscribing to the comment feed for this post.

The comments to this entry are closed.