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Sunday, January 28, 2007

Tax Gap hits Quarter Trillion - Expect More Audits

Congress is getting more on concerned about the rising tax gap.  The tax gap is the difference between what tax payers owe and what they pay.  They are basically uncollected receivables.

Congress has been stepping up its support of the IRS to go after delinquent payments.  Budgets for audits have risen to almost $50 billion to chase after a tax gap of $290 billion.

Audits frequency is increasing and audits of wealthy tax payers and businesses has more than doubled since 2000.  So this means that the average business tax payer can expect less wheeling and dealing with the IRS on settlements and more audits in the years to come.