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Gee, weren't we just discussing basis tracking? I swear, I didn't put Roy up to this.

The tax gap has become a hot-button issue in Washington, with good reason. Last year, the IRS estimated that the 2001 gap was $311 billion, and that only about $56 billion of those funds would ever be recovered, given the agency's current capabilities. This year, the IRS is expected to release updated tax-gap estimates, showing that the problem has since grown significantly worse.

I'm always suspicious of IRS's tax gap numbers. It's a loosely defined term, and in the old days there were at least two sets of numbers, depending on what type of Congressional committee was inquiring. Somehow the number was always higher when Appropriations was asking than when Oversight was.

That said, IMO we'd benefit from another round of Taxpayer Compliance Measurement Program (TCMP) audits, a/k/a the audits from hell, in which the randomly selected victims have to prove everything. One legendary change brought about as a direct result of TCMP was SSN's for toddlers. In the first year SSN's were required something like 25 million dependents disappeared from returns. Congress quickly lowered the age requirement to birth.

The last time there was a TCMP relatively few people owned stock. I'm not at all surprised GAO is finding this a playground.

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