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http://www.accountingtoday.com
An influential senator is asking the Internal Revenue Service to put a system in place to track the specific sources of unpaid corporate taxes.
Senate Finance Committee ranking member Ron Wyden, D-Ore., wrote to IRS Commissioner John Koskinen urging the IRS to establish such a system in advance of this week’s budget hearings with the U.S. Treasury Department and the IRS. Koskinen is testifying before the committee on Wednesday, following an appearance earlier in the day by Treasury Secretary Jack Lew.
The IRS has estimated the annual “tax gap,” the net shortfall between the amount of taxes paid versus the amount owed, at $385 billion. As part of an analysis the IRS has identified the portion attributable to corporations at $67 billion per year, suggesting potentially $700 billion in uncollected revenue over ten years. Currently, however, the IRS does not have a mechanism in place to identify sources of this lost money. Understanding the reasons why this money is not being paid and who is responsible would help Congress draw up tax legislation.
“As you might imagine, it is disconcerting to me that the IRS, whose core responsibility is the proper collection of tax, has no system in place to identify the sources of corporate tax avoidance, evasion, and noncompliance with any specificity,” Wyden wrote in a letter last week.
Wyden said he plans to investigate this issue further during this week’s budget hearings.
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