May 10, 1996
IRS Estimates Show Little Change
in Noncompliance Rate
WASHINGTON - More than 99 percent of wage income is correctly
reported to the Internal Revenue Service, but less than 70 percent
of net income earned by unincorporated businesses is, according to a
study of 1992 tax behavior just released by the IRS.
The study echoes earlier data that show individuals fail to
voluntarily pay 17 percent of taxes due on time -- or about $95
billion each year. The study shows high compliance where there is
withholding or information reporting and substantially lower
compliance in other areas.
"We are determined to raise the compliance rate and make sure
that every taxpayer pays what's owed," said IRS Commissioner
Margaret Milner Richardson in releasing the study. "The majority of
taxpayers who pay what they owe on time have a right to expect that
others will do likewise. That's what fairness is all about."
Copies of the study -- Publication 1415, "Federal Tax Compliance
Research: Individual Income Tax Gap Estimates for 1985, 1988, and
1992," -- are available from the IRS Compliance Research Office,
CP:R:R, 1111 Constitution Ave., N.W., Washington, D.C. 20224
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