Opportunities to reduce the Tax Gap

Efforts to close the $496 billion “tax gap” continue to make news. The tax gap is defined as the difference between federal income tax owed and the amount timely paid. One of the largest segments of the gap (16% of the total) is underreporting by sole proprietors, according to a report by the Government Accountability Office (GAO). The report shows that the IRS and the U.S. Treasury haven’t implemented most of the GAO’s previous recommendations. One solution the GAO is again promoting is to implement voluntary withholding for sole proprietors and their companies. The IRS expressed disagreement with much of the GAO’s plan. Here’s the report: https://bit.ly/3SMB0yu