IRS Seeks Credit Card Reporting
http://creditfederal.com/article/articles/214/1/IRS-Seeks-Credit-Card-Reporting
By CreditFederal.com - A good or bad credit personal loan, auto and mortgage financing, and credit card resource.
Published on 04/28/2006
To ensure small businesses pay all due taxes, the IRS wants credit card issuers to report on transactions.
IRS wants credit card issuers to help ensure small businesses pay all due taxes
Small-business owners could find it harder to cheat on their taxes in the coming years, as the IRS pushes credit card companies to report annual credit and debit card purchases.
The nation's tax gap - the difference between taxes owed and taxes paid - is a serious problem. Even after IRS enforcement actions, audits and collection of late payments, the agency estimates the shortfall at $290 billion annually.
If the tax gap were eliminated, it could generate enough revenue to almost eliminate last year's $318 billion budget deficit - without raising taxes.
Alternatively, efforts to close the tax gap also could offset the $70 billion cost over 10 years of extending tax cuts that are due to expire this year and in the future.
A House-Senate agreement on the tax cut renewals was nearly ready for a vote when Congress recessed for its two-week Easter-Passover break, but the tax gap was not on the agenda.
Critics of the IRS proposal point out that reporting credit and debit card receipts generated by small businesses would close the tax gap by only $20 million annually, according to a Treasury estimate.
Should the IRS be successful in gaining additional tax revenue via business credit card transaction reporting, everyday consumers, making everyday purchases via a credit card, could be the next demographic targeted by the IRS.
Calculate withholding and tax online with our free tax calculator. Ready for internet filing? Use our recommended free irs tax preparation and filing.
The nation's tax gap - the difference between taxes owed and taxes paid - is a serious problem. Even after IRS enforcement actions, audits and collection of late payments, the agency estimates the shortfall at $290 billion annually.
If the tax gap were eliminated, it could generate enough revenue to almost eliminate last year's $318 billion budget deficit - without raising taxes.
Alternatively, efforts to close the tax gap also could offset the $70 billion cost over 10 years of extending tax cuts that are due to expire this year and in the future.
A House-Senate agreement on the tax cut renewals was nearly ready for a vote when Congress recessed for its two-week Easter-Passover break, but the tax gap was not on the agenda.
Critics of the IRS proposal point out that reporting credit and debit card receipts generated by small businesses would close the tax gap by only $20 million annually, according to a Treasury estimate.
Should the IRS be successful in gaining additional tax revenue via business credit card transaction reporting, everyday consumers, making everyday purchases via a credit card, could be the next demographic targeted by the IRS.
Calculate withholding and tax online with our free tax calculator. Ready for internet filing? Use our recommended free irs tax preparation and filing.