U.S. Lost $81 Billion in '81 Taxes, IRS Says
The federal government lost at least $81.5 billion in taxes in 1981ÛÓ more than the budget deficit for that yearÛÓbecause corporations and .individuals failed to pay all they owed, according to Internal Revenue Service estimates.,</br></br>Most of the so-called ÛÏtax gapÛ was attributable to individual taxpayers, according to Dennis Cox, chief of the compliance estimates group of the IRS, which tries to put some dimensions on the amount of taxes unpaid. ÛÏCorporations donÛªt have much of a tax gap anymore because they donÛªt pay very much tax,Û he said.</br></br>The estimates, contained in a report completed earlier this year, may even understate the tax gap, he indicated. Based on applying patterns of taxpayer compliance in the past to 1981 figures, the $81.5 billion reflected taxes not paid on legally earned income. Another $9 billion in lost income taxes should have been paid on proceeds from illegal drug sales, gambling and prostitution, according to preliminary estimates.</br></br>Cox told the National Economists Club yesterday that most of the estimated underpayment of taxesÛÓ $52 billion of the totalÛÓreflected the under-reporting of income, with additional amounts attributable to overstated business expenses, overstated personal deductions, taxes reported but not paid and other factors. * accounting for a 20 percent shortfall in taxes collected. He also said that some of the $81.5 billion lost in 1981 has since been recovered, but that an exact amount is hard to calculate.</br></br>Earlier in the day, IRS Commissioner Roscoe L. Egger Jr. unveiled the 1983 tax forms and new technol-