Intentional disregard of the law is the primary contributor to the tax collection gap experienced by the IRS, according to nearly half the CPAs surveyed in an online poll by the AICPA.
While 48.4 percent of the 1,290 respondents to the survey blamed scofflaws, 28.1 percent believed it was the complexity of the tax laws or constant changes in those laws that were the primary contributors. Another 1.3 percent attributed the gap to honest errors and mistakes.
Underreporting of income was counted as the major component behind the tax gap, according to 54.9 percent of the respondents. Another 21.3 percent said the gap was mainly caused by overstatement of deductions, while 12.3 percent attributed the gap to the failure to file returns.
CPAs were also asked about their experiences with clients and potential clients who had not filed their 1040 returns for several years. The survey found that 48.5 percent of the respondents believe that taxpayers often fail to file due to a traumatic event and then continue to be non-filers out of fear of the consequences. Another 21.1 percent believe that taxpayers remain non-filers because they believe they are not required to file or they think they will never be caught.
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