Senate bill would up ante for tax e-filing, target delinquent contractors

Sen. Tom Carper (D-Del.) has introduced legislation that would lower tax compliance burdens and crack down on delinquent taxpayers, including federal contractors. 

Carper’s measure (S.1289) would build on similar legislation introduced last year and seeks to lower the federal deficit.

The bill would target noncompliant filers with provisions to improve tax forms and tax administration and decrease tax avoidance by contractors.

The measure would also strengthen online filing requirements in order to reduce paperwork costs and would require the Internal Revenue Service to examine ways to simplify tax forms, particularly for small businesses, Carper said.

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The bill would enable the IRS to strengthen its data matching and auditing systems to more quickly identify noncompliant taxpayers.

The IRS estimated the “tax gap” -- or the difference between what taxpayers owe and what they actually pay -- was $290 billion in 2001. Carper’s office said the gap has certainly grown since that last figure.

“Reducing the tax gap is a common-sense approach to combating our nation’s ballooning debt,” Carper said. “As we work on developing a culture of thrift within our government, it makes to sense to go after the low-hanging fruit first. My bill takes the necessary steps to cracking down on lawbreakers, which will lower costs for law-abiding Americans while reducing our deficit.”

Sen. Barbara Boxer (D-Calif.) cosponsored the measure, which has been referred to the Senate Finance Committee.