Academic journal article Journal of Accountancy

GAO Suggests Further Reform for IRS Nonfiler Program

Academic journal article Journal of Accountancy

GAO Suggests Further Reform for IRS Nonfiler Program

Article excerpt

The U.S. General Accounting Office said tire Internal Revenue Service could improve its collection strategy for the more than $10 billion lost because some individuals do not file tax returns. A report, Results of Nonfiler Strategy, and Opportunities to Improve Future Efforts, identified several areas in which improvements could be made.

In 1993, the IRS identified approximately 10 million known individual and business nonfilers by matching data on information returns, such as wage and withholding statements from employers, with data on filed income tax returns. Depending on the facts of the case and available resources, the IRS either may take no action or conduct a detailed investigation.

The GAO said a recent IRS effort had reduced the size of the nonfiler inventory, eliminated unproductive cases and increased the number of returns secured from individual nonfilers. However, the GAO said it was unclear how much voluntary taxpayer compliance increased as a result. For example, of the nonfilers who were brought into compliance in 1993, 38% had not filed a tax year 1993 return by August 1995--16 months after the returns were due. …

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