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Treasury Inspector General for Tax Administration

Press Release


August 9, 2010
TIGTA - 2010-41
Contact: Karen Kraushaar
(202) 622-6500
karen.kraushaar@tigta.treas.gov
TIGTA-PAO@tigta.treas.gov

TIGTA Report: Plans Exist to Engage the Tax Preparer Community in Reducing the Tax Gap; However, Enhancements Are Needed

WASHINGTON - The Internal Revenue Service (IRS) could do more to encourage tax preparers to reduce the $345 billion Tax Gap, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

While the IRS's 2009 Strategic Plan contains objectives and strategies designed to reduce the tax gap by engaging the tax preparer community, the plan does not contain sufficient measures for the IRS to evaluate its goals, TIGTA found. Without specific performance measures, the IRS will not be able to monitor the effectiveness of its preparer-engagement strategies.

The Tax Gap is the difference between the annual Federal tax obligation and the amount of tax the taxpayer pays voluntarily and timely. Taxpayers who fail to file their returns, fail to make their payments on time, file taxes but underreport their income, or underpay the amounts owed, or file taxes but overreport their expenses, all contribute to the Tax Gap.

"Paid tax preparers prepared more than half of individual tax returns in 2009," said J. Russell George, the Treasury Inspector General for Tax Administration. "The IRS must step up its efforts to engage this community in its effort to close the Tax Gap."

TIGTA recommended that the IRS update its current strategic plan to more clearly define its future objectives and ensure more effective tax administration. The IRS agreed to include TIGTA's recommendations in its next strategic plan, to be issued in 2013.

To view the report, including the scope, methodology, and full IRS response, go to: http://www.treas.gov/tigta/auditreports/2010reports/201030061fr.pdf.

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