The IRS is promising its focus on increased tax compliance will help with the nation’s debt problem.
“Achieving our goals will result not only in a fairer tax system,” IRS commissioner Danny Werfel testified before Congress in October, “but also in benefits for taxpayers and the nation because detecting and stopping noncompliance in these areas would result in significant additional revenues and reduce the deficit.”
Not so fast, says one expert.
Even if the Internal Revenue Service achieves a 100% collectible rate, up from the current 86.3% net compliance rate, and closes the estimated $688 billion tax gap, that won’t be enough to meaningfully shrink the chasm between how much the US spends versus how much revenue it takes in.
“You’re running a $1.7 trillion dollar deficit,” Scott Hodge, president emeritus and senior policy adviser at the Tax Foundation, told Yahoo Finance. “Even…