Some news on tax evasion from TaxWire:
The IRS’s efforts to shrink the tax gap — the difference in the amount of taxes owed and taxes paid — must improve significantly to preserve the public’s confidence in the tax system and help offset mounting deficits, panelists agreed on .
Speaking at the American Bar Association Section of Taxation’s midyear meeting in San Diego, National Taxpayer Advocate Nina Olson and copanelists David Cay Johnston, reporter for The New York Times, and Patrick Heck, Democratic chief tax counsel for the Senate Finance Committee, suggested that recent estimates of a $250 billion to $300 billion tax gap are probably not accurate — and are very likely too low.…
Olson also suggested that increasing compliance, and therefore reducing part of the tax gap, depends on changing social norms. She said the largest section of the tax gap — roughly 67 percent — results from nonreporting and underreporting by self-employed individuals, typically on income that is not subject to information reporting.
The social norm among that group is that it is all right not to report income, Olson said. “What kind or resources does it take to change the social norm?” she asked, suggesting that the IRS needs a nationwide strategy to clean up the “entire environment” of noncompliance.