Two months after a senator said he would hold up Treasury appointments until the department provided a comprehensive plan to close the tax gap, the Treasury Department has issued a report titled, “A Comprehensive Strategy for Reducing the Tax Gap.”
Issued from the Treasury’s Office of Tax Policy on Sept. 26, the report describes itself as “a broad base on which to build” a plan to close the gap. Estimates put the hard-to-quantify tax gap, the difference between taxes legally owed and taxes collected, at upwards of $300 billion annually.
In late July, Sen. Max Baucus, D-Mont., the ranking minority member of the Senate Finance Committee, said he would hold up the nomination of Eric Solomon to be the assistant secretary of the Treasury for tax policy until the department put a plan to address the tax gap in writing. Solomon’s hearing for the position -- which has been vacant since 2004 -- was first delayed to make way for that of Treasury Secretary Henry Paulson, who was sworn into his position in July.
The Treasury’s report says that the details of the tax gap strategy are contingent upon the budgeting process, but that both the Treasury and the Internal Revenue Service would provide a detailed outline of steps after the release of the 2008 fiscal year budget request early next year.
The “four key principles” the Treasury said would guide strategy development include:
- Addressing unintentional taxpayer errors and intentional taxpayer evasion;
- Targeting, with specificity, sources of noncompliance;
- Combining enforcement activities with a commitment to taxpayer service; and,
- Crafting policy positions and compliance proposals that are sensitive to taxpayer rights, while maintaining an appropriate balance between enforcement activity and imposition of taxpayer burden.
The full report is available at www.treas.gov/press/releases/reports/otptaxgapstrategy%20final.pdf.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access