Academic journal article Journal of Accountancy

Hoffman Testifies on "Tax Gap." (Arthur S. Hoffman, Chairman of the American Institute of CPAs)

Academic journal article Journal of Accountancy

Hoffman Testifies on "Tax Gap." (Arthur S. Hoffman, Chairman of the American Institute of CPAs)

Article excerpt

HOFFMAN TESTIFIES ON "TAX GAP"

Likely causes for tax law noncompliance and the resulting "tax gap" were presented by Arthur S. Hoffman, chairman of the American Institute of CPAs federal taxation executive committee, in testimony before the House Ways and Means Subcommittee on Oversight.

According to Hoffman, the extreme complexity of federal tax laws and regulations "make it literally impossible for many taxpayers to be able to determine the amount of taxes they owe." Moreover, the complexity has eroded public confidence that the law is treating everyone fairly. "The uneasy, perhaps even subconscious, feeling that others are escaping tax can be used as a rationalization for cutting a few corners," he said.

He added that what Congress intends as a tax incentive may be perceived by others as a tax loophole. "The perception that Congress is intentionally allowing wealthy taxpayers and big business to escape taxes legally," Hoffman said, "can be a strong motivation for others to create their own tax savings. …

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