The amount of tax payable that is not paid by taxpayers is expected to reach trillions of dollars over the next ten years, a Treasury Department official said on Thursday.
Assistant Under Secretary for Fiscal Policy Mark Mazur told lawmakers the tax gap could reach $ 7 trillion over the next decade, equivalent to 15% of all taxes owed.
The estimated tax gap for 2019 alone is around $ 580 billion, he said Thursday during testimony before a House subcommittee.
IRS WANTS CONVENTION TO HELP COLLECT CRYPTOCURRENCY TAX INFORMATION
Unchecked non-compliance can have long-term negative consequences for 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 country’s fiscal priorities, or higher budget deficits and larger amounts of federal debt.” , did he declare. “Widespread and persistent non-compliance also undermines confidence in the fairness of our tax system.
Mazur noted that three factors typically contribute to the tax gap, including whether a taxpayer files a return, whether the correct amount has been declared, and whether owed obligations have been paid.
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As previously reported by FOX Business, IRS Commissioner Charles Rettig told lawmakers that more information reports would help the tax agency collect what is owed to it from taxpayers.
He said Thursday that the IRS needs the authority of Congress to request more information on digital currency transactions to make sure people pay.
Rettig estimated that the most recent market cap in the crypto world was over $ 2,000 billion and over 8,600 exchanges worldwide.