Defaulters cheated the IRS of billions of dollars: why are they not punished

Governmental control group warns that the Tax administration of the USA (IRS) needs to do more to hold accountable people in the US with high income, many of whom get away with failure to file tax returns and tax evasion, writes Fox News.

Неплательщики обманули IRS на миллиарды долларов: почему их не наказывают

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In the report of the inspector General of the Treasury for tax administration entitled “Tax administration is not working on non-payers with high incomes, which have billions of dollars,” researchers have identified more than 879 400 individuals with high incomes, with the alleged unpaid tax in the amount of $45.7 billion They paid taxes and had not filed the Declaration in the period from 2014 to 2016.

The IRS has not taken any action for the collection of payments from 369 180 people who took out $20.8 billion 42 000 cases were closed, although it was not performed any work. Researchers believe that other 510 235 defaulters, most likely, will not be prosecuted due to the reduction of resources of the Tax administration.

Top 100 persons with high income for the years 2014-2016, which the IRS had not considered, needs nearly $10 billion.

“Non-payers with high income is a small percentage among people who do not submit tax returns; however, they reflect a higher risk of noncompliance than others, and working with these businesses brings a great return on investment, write the researchers. Thus, the IRS has the incentive for dealing with non-payers with high income.”

In a statement included in the report, an official from the IRS said that the Agency remains committed to the idea to call the defaulters to account.

“The problems discovered in the course of this audit reflect problems with resources, which the IRS has faced in recent years, the official said. — It will take time and additional resources for our law enforcement to provide a strong, visible and reliable presence of the tax authorities”.

The representative refused to give further comments.

The IRS is struggling as downsizing and declining resources. In particular, in the labour force Tax administration has been reduced by 19% in the period from 2013 to 2018 financial years. According to the Agency, it has lost half of its offices and about a third of the workforce over the last decade. Financing Tax service in 2018 amounted to $11.4 billion compared to $12.15 billion in 2010.

According to the report, the tax gap in the period from 2011 to 2013 amounted to $441 billion, of which $39 billion (or 9%) accounted for the apparent failure to file returns. Intentional refusal to file tax documents is a Federal crime and could result in penalties.

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