IRS Needs More Than Audits to Find Tax Cheats, Former Chief Says

The U.S. Internal Revenue Service needs additional tools beyond audits to find individuals and businesses that are underpaying their federal tax bills, a former commissioner of the agency told a congressional panel on Tuesday.

“Simply scaling up what the IRS does today will not produce the desired results,” Charles Rossotti said at a Senate Finance subcommittee hearing. “As important as audits are, currently, all of IRS audit activity only recovers about 2.5% of the tax gap.”

Rossotti, who was IRS commissioner from 1997-2002, said the agency requires more information about bank account flows for high-income taxpayers and upgraded computer systems ...