State Tax Amnesty Data Could Help IRS Enforcement

by Leroy Baker, Tax-News.com, New York

07 October 2005

By failing to utilise information gathered in state and local tax amnesties, the Internal Revenue Service is missing a "unique opportunity" to bolster its own enforcement initiatives, a new report by the Treasury Inspector General for Tax Administration (TIGTA) has observed.

The TIGTA report stated that at least 41 states and two cities have conducted amnesties of various types over the past 23 years, collecting more than $5.7 billion in the process. However, it would appear from the report that the IRS has ignored the potentially valuable information that these amnesties have unearthed, which could have been used to help enforce federal tax compliance.

"Consequently, the IRS is missing a unique opportunity to address noncompliant taxpayers who have acknowledged their noncompliance with tax laws to state governments and who also owe federal taxes," the report said.

An IRS study has found that 16 out of 20 states have shown a willingness to share taxpayer information at the federal level, and the agency has now established a new task force to review state tax amnesty data.

Recommended