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Keeping up on the latest tax news is probably pretty low on your list of things to do. The continual discuss of a huge tax gap, however, is something you should pay attention to.
In the 1990s, the IRS became a whipping boy for politicians. When politicians want to get elected or re-elected, they usually go after a couple basic things. [link widoczny dla zalogowanych] One is some more argument such as pornography on the internet or, recently, the horrors of online poker sites. The other is the completely evil people at the IRS. After all, who can really argue with these positions?
For some reason, the IRS really took some hits in the 1990s. The tax code was modified in bizarre ways that created plenty of loopholes and made collection of taxes a iffier proposition. On top of this, Congress slashed a significant part of the budget of the Agency, making audits and such a less common factor. As you might guess, this is all coming back to haunt the politicians. A tax gap has been created and our representatives in Washington don't have all the money they need to spend.
A tax [link widoczny dla zalogowanych] gap is simply the difference between the money the IRS collects and [link widoczny dla zalogowanych] the amount it should have collected. How can there be a difference? Well, some people just stop reporting taxes. Others tend to under report their income or claim [link widoczny dla zalogowanych] dubious tax deductions and credits. When the IRS compares the total revenue collected for the year versus a statistical analysis of business and personal earnings nationwide, it comes up with a number that represents the tax gap.
For the last few years, there [link widoczny dla zalogowanych] has been an absolutely monstrous tax gap. How big? Try between 290 and 345 BILLION dollars a year. Think about that number for a minute? It represents [link widoczny dla zalogowanych] the total approximate amount we have spent in Iraq. Wait, maybe the tax gap is a good thing. I am not sure we need to be giving the current administration much more money, but I digress.
Regardless of your politics, the tap gap is bad news for all of us. [link widoczny dla zalogowanych] Why? Well, politicians are addicted to money. Since the government is getting shorted each year, they have decided to do something about it. Nothing has unified the [link widoczny dla zalogowanych] Democrats and Republicans like this issue. They have quietly passed legislation to boost the IRS budget. Guess where the money is going? Yep, the [link widoczny dla zalogowanych] enforcement department. Can you say [link widoczny dla zalogowanych] audits...lots of audits?
Whether you like it or not, tax audits are going to start to become more common this year and in the future. Ah, [link widoczny dla zalogowanych] a war on the people.
Richard A. Chapo is with BusinessTaxRecovery.com - providing [link widoczny dla zalogowanych] information on .
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