IRS Sees $300 Billion Gap – Since the media continue to accept these kinds of statements from IRS as absolute fact, I will once again remind everyone that these highly publicized tax gap figures are nothing more than WAGs (wild ass guesses).  I have done my own research with IRS personnel as to their source of the unreported income and its tax.  They have admitted to me that such measurements are impossible to make with any definitive accuracy.  They claim that their made up numbers are as accurate as anyone else’s because there is no way to dispute them.  It’s just the standard IRS scare tactic for tax season. 

Again, as I’ve said for decades, the premise that everyone is a tax cheat is bogus.  I have reviewed thousands of tax returns prepared by taxpayers and other tax pros and can unequivocally state that people pay too much in taxes through a combination of ignorance and incompetence in filling out the tax forms.  I have seen plenty of people who even intentionally overpay their taxes as a way of trying to keep IRS off of their backs. In the private market organized crime world (as opposed to the government sponsored one), this is usually referred to as “protection” money. 

So, I feel extremely confident in declaring that the tax gap in this country is not anywhere close to a negative $300 billion; but is quite possibly a positive figure, with people paying too much.  My numbers can’t be verified or disputed with any scientific accuracy; but at least I’m honest about that fact. Not like the IRS and their lackeys in the media who will use their imaginary figure to justify more money and power for taxpayer harassment.   

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/29/2005 10:20:00 PM Send this post: