
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, May 19, 1994                   TAG: 9405190163
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short

IRS NOT DOING ENOUGH AUDITS, REPORT CHARGES

The Internal Revenue Service failed to collect $127 billion in taxes in 1992. Yet audits that might have curbed this ever-growing tax gap were conducted at half the rate of 11 years earlier, a congressional report says.

Between 1981 and 1992, the chances of getting audited fell from one in 20 to one in 33 for corporations and from one in 56 to one in 110 for individuals. And even those numbers may be optimistic, the watchdog General Accounting Office said.

"IRS classifies certain taxpayer contacts as audits when in fact taxpayers' books and records were not examined," it said.

The $127 billion tax gap in 1992, the latest year available, was 67 percent larger than the $76 billion gap in 1981. If all of it had been collected, it would have cut the record $290 billion budget deficit of 1992 nearly in half.

The gap represented 18 percent of what taxpayers owed the government. IRS Commissioner Margaret Milner Richardson has vowed to reduce that to 10 percent by 2000.

But Rep. John Olver, D-Mass., who ordered the GAO report for the House Appropriations subcommittee that has jurisdiction over the IRS, said the service's initiatives probably won't enable it to accomplish its ambitious goals. A special $405 million appropriation for improved enforcement requested by Richardson for 1995 is just a start, he said.

"A very substantial number of people are either paying no taxes or substantially less than they owe because ... compliance and review have become very lax. That's extremely unfair for the vast majority of Americans," Olver said.

by CNB