Closing the Tax Gap through Modern Information Technology

PictureBy Sam Hampton

Congratulations—you just hit a $5000 jackpot on a slot machine! Would you be more likely to report this income on your 1040 (as you should) if you knew the casino would report the winnings to the IRS? Would you be more likely to report a cash tip income if you found out that a waiter had been prosecuted for tax fraud for failure to report his tips? A recent New York Times article suggests that taxpayers are much more likely to report in either of these situations—and modern information technology provides new avenues for both auditing and monitoring taxpayers. Continue reading