Internal Revenue Service owed more than $58 billion US
More than 1.6 million businesses in the United States owe the Internal Revenue Service (IRS) more than $58 billion (all figures US) in unpaid taxes for social security, Medicare and unemployment insurance, according to the Government Accountability Office (GAO).
A report said payroll taxes comprise more than one-fifth of IRS’ $282-billion inventory of outstanding taxes, penalties and interest owed by businesses and individuals and more than one-half of the total amount owed by businesses.
The IRS has several tools to prevent the accumulation of unpaid taxes and to collect the taxes owed, says the GAO, but acknowledges its traditional collection methods do not always help with compliance.
“The failure to remit payroll taxes can give the non-compliant business an unfair competitive advantage,” said the report. “Businesses that fail to remit payroll taxes may also under bid tax-compliant businesses, causing them to lose business and encouraging them to also become non-compliant… In an era of growing federal deficits and amidst reports of an increasingly gloomy fiscal outlook, the federal government cannot afford to allow businesses to continue to accumulate unpaid payroll tax debt with little consequence.”
The office made several recommendations to the IRS in its report found at www.gao.gov/new.items/d081034t.pdf.
