IRS News Release  
May 10, 1996

IRS Estimates Show Little Change
in Noncompliance Rate

WASHINGTON - More than 99 percent of wage income is correctly reported to the Internal Revenue Service, but less than 70 percent of net income earned by unincorporated businesses is, according to a study of 1992 tax behavior just released by the IRS.

The study echoes earlier data that show individuals fail to voluntarily pay 17 percent of taxes due on time -- or about $95 billion each year. The study shows high compliance where there is withholding or information reporting and substantially lower compliance in other areas.

"We are determined to raise the compliance rate and make sure that every taxpayer pays what's owed," said IRS Commissioner Margaret Milner Richardson in releasing the study. "The majority of taxpayers who pay what they owe on time have a right to expect that others will do likewise. That's what fairness is all about."

Copies of the study -- Publication 1415, "Federal Tax Compliance Research: Individual Income Tax Gap Estimates for 1985, 1988, and 1992," -- are available from the IRS Compliance Research Office, CP:R:R, 1111 Constitution Ave., N.W., Washington, D.C. 20224

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