Chair's corner.

• Author: Williamson, Jimmy L.

By Jimmy L. Williamson, CPA, Cr.FA, DABFA Chairman, AICPA Board of Directors

When problems arise that affect CPAs and the public interest, it's our responsibility to speak out. One troubling example is the tax gap--the difference between what taxpayers legally owe and what is actually collected. It is now estimated, based on 2001 tax returns, at $290 billion annually on a net basis. This clearly is an area in which the profession can help to make a difference for the national good.

The Institute recently offered the profession's insights on the tax gap at a public hearing of the IRS Oversight Board, an independent group that oversees IRS administration and management and provides input. The Oversight Board has said the tax gap can best be addressed through a collective effort that would include Congress, the administration and other stakeholders, including the AICPA. While the Institute did not endorse any specific recommendations in its comments on options for closing the tax gap, we are ready to play a pivotal role in solving this pressing public interest problem.

The Oversight Board has proposed six strategies for reducing the tax gap:

* Simplifying the tax code.

* Improving information reporting and enforcement.

* Enhancing customer service, including additional funding for IRS collection and examination personnel.

* Developing a long-range plan for research.

* Ensuring a more productive partnership between the IRS and the tax administration community.

* Placing more emphasis on personal integrity in making tax decisions.

We believe that all of these steps are critical elements in any attempt to narrow the tax gap. In fact, the profession has long been an outspoken advocate of improvements to the tax system that would benefit the public. For example, we are on record saying that the complexity of the tax code hinders compliance and that tax simplification should be a high priority of any government action in the tax area. A 1995 AICPA study...