Tax gap projected at 15% of total taxes owed over the next 10 years, tax official says
Rep. Byron Donalds on Biden budget, taxes and state of Black America
Rep. Byron Donalds, R-Fla., discusses the Biden budget, taxes, the Congressional Black Caucus and the state of Black America.
The amount of tax liability that is not paid by taxpayers is likely to hit trillions of dollars over the next ten years, a Treasury Department official said on Thursday.
Deputy Assistant Secretary for Tax Policy Mark Mazur told lawmakers that the tax gap could reach $7 trillion over the next decade, which would be equal to 15% of all taxes owed.
The estimated tax gap for 2019 alone is about $580 billion, he said in testimony before a House subcommittee on Thursday.
IRS WANTS CONGRESS TO HELP COLLECT CRYPTOCURRENCY TAX INFORMATION
Unchecked noncompliance can have long-term negative consequences on the tax system, Mazur said.
"A larger tax gap generates the following results: higher tax rates elsewhere in the system, lower revenues to fund the nation’s fiscal priorities, or higher budget deficits and larger amounts of federal debt," he said. "Extensive and persistent non-compliance also undermines confidence in the fairness of our tax system."
Mazur noted that three factors generally contribute to the tax gap, including whether a taxpayers files a return, whether the correct amount was reported and whether the owed obligations were paid.
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As previously reported by FOX Business, IRS commissioner Charles Rettig has told lawmakers that more information reporting would help the tax agency collect what it is owed by taxpayers.
He said Thursday the IRS needed congressional authority to request more information on digital currency transactions in order to ensure people are paying up.
Rettig estimated that the most recent market cap in the crypto world exceeded $2 trillion and more than 8,600 exchanges worldwide.
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