Report to the Congress on Evasion of the Federal Gasoline Excise Tax

摘要

The report finds that the federal government is currently losing excise tax revenue of about $250 million a year from noncompliance with the federal excise tax on gasoline, of which $100 million is attributable to willful, organized evasion. Ordinary tax audit procedures usually cannot detect these types of schemes. Without a change in tax collection procedures, recouping these losses through enforcement would be very costly, intrusive, and burdensome for law-abiding taxpayers, and still would not be fully effective. Competitive pressures produced by such schemes engender further evasion. Thus, changes in tax collection procedures designed to end organized evasion are needed, the best means of which, the report concludes, is to move the point at which taxes are collected upstream, in the manner enacted by section 1703 of the Tax Reform Act of 1986. Such change has been estimated to increase excise tax receipts $1.1 billion over FY 1988-1992 and eliminate about 80% of the noncompliance. Current collection practices are described; recent disclosures about criminal schemes are cited; actions by state governments to reduce evasion are discussed.