The IRS estimates that around 85% of taxes are paid voluntarily and on time. But the tax gap, the difference between the taxes paid on time and those still owed, means hundreds of billions of dollars are missing every year. While politicians often look to increase or decrease taxes as a part of their platform, simply shrinking this gap by collecting the taxes due could solve problems and is fair to everyone.
There’s an estimated $574 billion tax gap per year
Charles Rossotti, the former IRS Commissioner, joins Kelly on this episode of the Taxgirl podcast to discuss how to shrink the tax gap. Charles goes over some of the ways the IRS can be modernized to not only collect all the taxes due but ensure a smoother process for preparers and filers.
Listen to Kelly and Charles talk about the tax gap:
- Charles’ article on how the government should target the tax gap instead of raising taxes
- Where does the gap come from?
- How the IRS can get those taxes
- Why doesn’t Congress enact changes to close the tax gap?
- The cost to close the tax gap
- The importance of information reporting
- Debunking the myth that someone’s taxes are too complex to audit
- Reconciliation forms
- How big the tax gap is compared to the average taxpayers
More about Kelly:
Kelly Phillips Erb created and hosts the Taxgirl podcast, your home for tax news, tax info, and tax policy. In each episode, she shares conversations about taxes, money, and the choices we make. Kelly is a tax attorney who works with taxpayers and tax practitioners like you every day. She helps folks out of tax jams, and hopefully, keeps others from getting into them.
You can find out more about Kelly here and you can follow her on Twitter, Facebook, Instagram, and Linkedin.
To subscribe to the podcast (it’s free!) using Apple, Spotify, or your favorite listening app, click here.
Links mentioned:
Kelly’s Website: Taxgirl
Charles Rosotti: Bloomberg article
Shrink the Tax Gap: Website