Federal Tax Updates IRS Funding, Tax Gaps, and Modern Tech
Feb 10, 2025
Annette Nellen, a CPA, attorney, and professor at San Jose State University, shares her expertise on IRS challenges. She discusses the growing tax gap and the crucial need for consistent IRS funding. The conversation highlights efforts to modernize IRS services, including enhanced online accounts and tech solutions. Nellen also addresses the regulation of tax preparers and the complexities of cryptocurrency reporting, emphasizing the importance of tax literacy and education for professionals in the evolving tax landscape.
AI Snips
Chapters
Transcript
Episode notes
The Tax Gap
- The "tax gap" is the difference between taxes owed and taxes collected.
- It's estimated at $600+ billion annually, exceeding corporate income tax revenue.
Tax Gap Contributing Factors
- The tax gap is influenced by unintentional non-compliance and intentional tax evasion.
- Increased information reporting and withholding are effective in reducing the tax gap.
Third-Party Reporting Limits
- Third-party reporting is effective but can become overly intrusive.
- Requiring every transaction to be reported would close the tax gap, but would be an excessive burden.