Chuck Grassley: “I wish to finish the discussion I started earlier today about the tax gap and efforts to close it. As I said this…”

“I wish to finish the discussion I started earlier today about the tax gap and efforts to close it. As I said this morning, the tax gap is the difference between what is paid in taxes and what is actually owed. While more reliable and timely data on the tax gap is greatly needed, the tax gap was thought to be $345 billion for the tax year 2001, which seemed to be the year that the IRS had the latest information where they could put together something that was fairly solid for that year. I also pointed out this morning that many of my colleagues in the Senate see the tax gap as a sort of magical tonic that can be used to cure all sorts of ailments. Some people see $345 billion in AMT relief or health care spending or national debt reduction without thinking about what would be involved in actually collecting the money. So I am raising the question: Do people think through whether every dollar will be brought into the Federal Treasury? The IRS is already making some progress in closing the tax gap. This morning I mentioned the Internal Revenue Service told the Budget Committee it could reduce the tax gap by nearly $70 billion, of that $345 billion, in the year 2007. So where does that leave us? Can we do more in enforcement? The administration has proposed an increase in funding for the Internal Revenue Service.”