Reuters New Service reports that President Barack Obama proposed nearly doubling funds to enforce the federal tax laws next year and plans to quadruple funding for tax compliance to $2.1 billion within five years.
The budget plan seeks a 5.2 percent increase over the IRS budget for 2009. The IRS is responsible for collecting and enforcing individual and corporate tax laws. The budget proposal, which must be approved by Congress, includes a $890 million request to boost tax enforcement, including in the international arena, an increase of $400 million from 2009.
Underreporting of income by individuals and businesses led to a federal tax shortfall of $345 billion in 2001. Of that, corporate income tax and employment tax underreporting made up about $84 billion, according to a report by the Government Accountability Office.
The Obama administration said it would use the funds to further expand its efforts to boost compliance outside the U.S., “placing greater scrutiny on cross-border transactions and tax issues.”
Obama unveiled a series of proposals to overhaul mainly corporate tax rules and close loopholes in an effort he said would raise $210 billion over 10 years.
Included was a proposal to tighten rules on financial institutions which hold money abroad for U.S. citizens.
The U.S. government is suing giant Swiss bank UBS AG to get the names of thousands of mostly wealthy U.S. clients who may be trying to evade tax laws by keeping their money overseas.