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Christine Grimaldi

Legislation aimed at narrowing a tax gap in the $300 billion range includes reforms split between cracking down on noncompliant filers and loosening compliance burdens on people who voluntarily pay taxes.

Senate Finance Committee member Tom Carper (D-Del.) introduced the Taxpayer Advocacy and Government Accountability Promotion (TAX GAP) Act (S. 1289) June 28, the same day National Taxpayer Advocate Nina Olson told the tax-writing panel that excessive enforcement efforts alienate compliance (125 DTR G-2, 6/29/11).

To that end, the legislation requires the Internal Revenue Service “to examine ways to simplify tax forms and reduce the burdens of filling out tax forms, particularly for small businesses,” a previous Carper hit news release said.

“Provisions in the legislation are expected to enable the IRS to improve its data matching and auditing systems to more quickly identify noncompliant taxpayers, which will result in fewer taxpayers being subjected to unnecessary audits,” the release added.

Noncompliant filers, however, face more than a dozen provisions in the bill that span improvements to tax forms and tax administration, enhancements to reporting, and others aimed at ensuring the federal government receives its due revenue.

“My bill takes the necessary steps to cracking down on lawbreakers, which will lower costs for law-abiding Americans while reducing our deficit,” previous Carper said in the release.

The tax gap stands at $345 billion as last calculated by IRS in 2001, or $290 billion after factoring in enforcement collections and late payments.

Carper introduced similar legislation in the 111th Congress.