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Income tax crime and government responses in the United States 1998‐2007

H. Wayne Cecil (Florida Gulf Coast University, Fort Myers, Florida, USA)
Raymond L. Placid (Florida Gulf Coast University, Fort Myers, Florida, USA)
Carl Pacini (Florida Gulf Coast University, Fort Myers, Florida, USA)

Journal of Financial Crime

ISSN: 1359-0790

Article publication date: 2 January 2009

677

Abstract

Purpose

The most recent IRS estimate puts the individual tax gap at $245 billion per year. This study seeks to develop and review performance measures for the seven most important IRS programs aimed at reducing the tax gap.

Design/methodology/approach

The study develops and analyzes performance measures for the last ten years. The performance measures include discovery rates, penalty rates, penalty dollars, abatement rates, abatement dollars, collection activity rates, and criminal enforcement activities (number of special agents, investigations, referrals, indictments, sentences, and length of sentences).

Findings

The results are mixed regarding changes in performance measures. There was almost no change in audit rates and increases in other IRS discovery programs. There was a steady decrease in civil penalties for the first seven years followed by increases in latest three years. There were decreases in abatements for most penalties, a dramatic decrease in seizures, and significant increases in liens and levies. There were noteworthy decreases in the number of special agents and criminal investigations. The relatively small number of criminal investigation activities is surprising given the amount of the tax gap.

Originality/value

This study examines all major programs aimed at the individual tax gap.

Keywords

Citation

Wayne Cecil, H., Placid, R.L. and Pacini, C. (2009), "Income tax crime and government responses in the United States 1998‐2007", Journal of Financial Crime, Vol. 16 No. 1, pp. 97-106. https://doi.org/10.1108/13590790910925000

Publisher

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Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited

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