IRS Should Target Individual Taxpayers Reporting Large Business Losses

The estimated annual “Tax Gap” exceeds $440 billion.  That is to say, the amount that U.S. taxpayers pay in taxes every year falls short of the amount actually owed by some $440-plus billion.  The Treasury Inspector General for Tax Administration—or, for those who prefer a more wieldy acronym, TIGTA—a government tax watchdog, has been engaged in an effort to determine how the IRS can make a meaningful dent in that ever-troubling Tax Gap.  The answer, in part, is more audits.  But more specifically, the right kinds of audits.  According to TIGTA, that means placing a particular focus on taxpayers who report “Schedule C” activity reflecting significant losses.

Schedule C Reporting

A sole proprietor engaged in a business is generally required to report the associated income and expenses on Schedule C of their Form 1040.  Much the same, an individual operating through a single-member limited liability company (LLC) is often

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Explainer: The $4 trillion U.S. government relies on individual taxpayers

WASHINGTON (Reuters) – The U.S. government’s over $4 trillion annual budget, the world’s largest, relies heavily on individual wage earners whose taxes and retirement benefits are deducted from every paycheck, leaning particularly on the top 20% of income earners.

FILE PHOTO: The Internal Revenue Service (IRS) building is seen in Washington, U.S. September 28, 2020. REUTERS/Erin Scott/

Corporations pay just a fraction of what individuals do into the federal spending pool, which funds the military, transportation safety, veterans benefits, regulatory agencies and programs like NASA.

A New York Times investigation here published on Sunday shows that President Donald Trump paid just $750 in federal taxes during the years straddling his 2017 inauguration, and none at all for 10 of 15 years before then. Trump dismissed the report as “fake news.”

Trump reported here income of at least $594 million for 2016 and early 2017 and assets worth at least $1.4

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The $4 trillion U.S. government relies on individual taxpayers

WASHINGTON (Reuters) – The U.S. government’s over $4 trillion annual budget, the world’s largest, relies heavily on individual wage earners whose taxes and retirement benefits are deducted from every paycheck, leaning particularly on the top 20% of income earners.

FILE PHOTO: The Internal Revenue Service (IRS) building is seen in Washington, U.S. September 28, 2020. REUTERS/Erin Scott/

Corporations pay just a fraction of what individuals do into the federal spending pool, which funds the military, transportation safety, veterans benefits, regulatory agencies and programs like NASA.

A New York Times investigation here published on Sunday shows that President Donald Trump paid just $750 in federal taxes during the years straddling his 2017 inauguration, and none at all for 10 of 15 years before then. Trump dismissed the report as “fake news.”

Trump reported here income of at least $594 million for 2016 and early 2017 and assets worth at least $1.4

Read More