IRVINE, Calif., Nov. 3, 2020 /PRNewswire/ — In recent years, there has been IRS increasing focus on the “tax gap,” or the difference between the amount estimated to be due in taxes each year and the amount actually paid. The alarming news for non-compliant taxpayers is that recent increased lobbying to elected officials over this tax gap has led to increased funding for IRS enforcement action to be taken against those who do not pay what they owe, as well as new initiatives micro-targeted at particular areas where enforcement has been seen as lacking.
The IRS will occasionally release a report on the tax gap, the most recent of which was released in 2019 and covered calendar tax years 2011–13. For those years, the average annual gross tax gap was reported to be $441 billion at the time that taxes were due, which amounts to slightly over 16 percent of the projected total tax liability. The IRS eventually recovered $60 billion through voluntary late payments and enforcement activities.
According to the Tax Policy Center, nearly half of the amount of individual income that went underreported comes from underreporting “by pass-through business filers such as sole proprietors, farmers, and those earning rental, royalty, partnership, and S-corporation income. They are prime targets for stepped-up enforcement.” If you fall into one of these categories and you have failed to report your income and assets correctly on past returns, it is vital that you reach out to a skilled Tax Attorney like those at the Tax Law Offices of David W. Klasing before the agency begins a investigation or audit into your behavior. Once an audit or criminal tax investigation has begun, mitigating the damage will become much more difficult (if not impossible) and you will likely end up facing high fines and even criminal tax charges if your behavior is deemed to have been willful. A voluntary disclosure can remove the risk of criminal tax prosecution even if your actions were clearly willful.
Call our office today at (800) 681-1295 or visit the contact us page of our website to schedule a reduced rate initial consultation.
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Public Contact: Dave Klasing Esq. M.S.-Tax CPA, dave@taxesqcpa.net
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