What Is the IRS Doing to Address the Tax Gap?
The IRS is making some progress in addressing certain components of the tax gap. For example, as the following chart shows, in Fiscal Year (FY) 2003, enforcement revenue collected increased by 10 percent after remaining fairly constant during the prior 3 years, and there were more collection actions in FY 2003 than in FY 2002. Additionally, after steadily rising for 6 years, the amount of gross accounts receivable was reduced slightly (by $1.67 billion) from FY 2002 to FY 2003. The IRS is taking a number of actions to improve its ability to react more quickly to an actual or potential tax debt. These actions include shortening the collection notice cycle and migrating toward a risk-based approach to collecting delinquent taxes.
