Congress Uses Tax Whistleblower Reward Program to Reduce Tax Gap
July 20, 2008 – 10:35 pmWhen taxpayers underreport their income or fail to file their tax returns the government must spend money to audit taxpayers, to assess the tax, to collect the tax, and to borrow money to cover the lost revenue. The amount of such noncompliance with the tax laws is called the “Tax Gap” and currently it is estimated to be $345 billion annually. Congress hopes the Tax Whistleblower Reward Program will reduce the Tax Gap. This article, by author David Rifkin, describes the scope, the causes of, and the tools available to Congress and the IRS to close the Tax Gap. In particular, the author examines the role enforcement and other methods play in closing the Tax Gap.