OTHER NEWS - June 22, 1995

GAO Criticizes IRS’ Efforts to Police Partnerships: The General Accounting Office, the investigative arm of Congress, concludes in a report that the Internal Revenue Service audits only one in 200 business partnerships and that it does not even try to catch those that do not file. Such partnerships account for billions of dollars in income, and they are an increasingly attractive means of sheltering income from taxes, the GAO said. The findings come as the IRS is struggling to close an estimated overall gap of $127 billion between taxes owed and taxes collected each year. Partnerships’ share of the tax gap was about $6 billion in 1982. However, the GAO said, it is nearly impossible to evaluate the seriousness of the problem today because the IRS has not studied the issue since then.