Saturday, January 7, 2012

IRS: Americans Underpaid Taxes by $385B in 2006

The Internal Revenue Service estimates that U.S. companies and individuals failed to pay $385 billion in taxes they owed in 2006, an increase from $290 billion five years earlier.

The agency said the rate of compliance remained almost unchanged at 85.5 percent, down slightly from 86.3 percent in 2001. The IRS announcement today is the first update to the so- called tax gap estimate in five years. The gap grew because the income base expanded between 2001 and 2006, the agency said.

The U.S. recorded a $248.2 billion budget deficit (EHBBUS) in 2006, according to the White House Office of Management and Budget. If the IRS had collected all of the taxes owed that year, the U.S. could have had a surplus of as much as $136.8 billion.

The biggest chunk of money that goes uncollected -- $235 billion -- comes from individuals, the IRS said. Of that, $122 billion is estimated to be taxes owed on business income that would be reported on an individual return.

The IRS estimated that $67 billion in corporate income tax wasn’t collected in 2006. Most of that -- $48 billion -- was from large corporations with more than $10 million in assets, the agency said.

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