In 2023, 30,163 taxpayers submitted Offers in Compromise amounting to $214.5 million. This is revenue that our government budgeted for that they are not getting.
Of the sources of revenue, Individual Income is the largest category defaulted on the tax responsibility.
$25.6 billion in additional taxes for untimely returns amounted to $2.8 billion. $ 104.1 billion in unpaid assessments on returns with additional tax due netting $68.3 billion.
Of the lowest Civil penalties to the IRS were Business Income, Estate and Gift tax approximately $5 billion compared to the $45 billion in Individual returns.
Individual returns represent 9x’s the default rate above all the other sources of revenue our government must work with.
So, the question and answer I pose regarding this issue is this. Why is it such a challenge the average American wage earner have such a difficult problem meeting their tax obligations and responsibilities? This is what I propose. I propose that unlike businesses and estates, the average Jack and Jill do not have year-round access to professional tax consulting to address life events that arise year-round.
As a result, they are looking at surprise tax obligations that often cripple them financially. Penalties, interest, levies, and liens are all resources the government utilizes to enforce the obligations that individuals are accountable for every year.