OTHER INFORMATION (UNAUDITED) 200

United States Government

Other Information (Unaudited) for the

Years Ended September 30, 2017, and 2016

Tax Burden

The Internal Revenue Code provides for progressive tax rates, whereby higher earned income is generally subject to

higher tax rates. The following tables present the latest available information on income tax and related income, deductions,

and credit: for individuals by income level, and for corporations by size of assets.

Individual Income Tax Liability for Tax Year 2015

Average

Total Average Income

Number of Income AGI Per Tax per Income

Taxable AGI Tax Return Return Tax as a

Adjusted Gross Income Returns (in millions (in millions (in whole (in whole Percentage

(AGI) (In thousands) of dollars) of dollars) dollars) dollars) of AGI

Under $15,000 .................... 35,824 61,630 2,033 1,720 57 3.3%

$15,000 under $30,000........ 30,043 662,661 18,468 22,057 615 2.8%

$30,000 under $50,000........ 26,539 1,040,372 57,698 39,202 2,174 5.5%

$50,000 under $100,000...... 32,802 2,339,474 205,693 71,321 6,271 8.8%

$100,000 under $200,000 .... 18,533 2,506,498 316,350 135,245 17,070 12.6%

$200,000 under $500,000 .... 5,428 1,546,515 299,832 284,914 55,238 19.4%

$500,000 or more................ 1,324 2,053,160 557,817 1,550,725 421,312 27.2%

Total ............................... 150,493 10,210,310 1,457,891
201 OTHER INFORMATION (UNAUDITED) 

Corporation Income Tax Liability for Tax Year 2014

Percentage of

Income Subject Total Income Tax Income Tax After

Total Assets to Tax After Credits Credits to 

(In thousands of dollars) (in millions of dollars) (in millions of dollars) Taxable Income

Zero Assets ................................ 16,236 5,347 32.9%

$1 under $500............................. 8,728 1,786 20.5%

$500 under $1,000 ...................... 3,787 918 24.2%

$1,000 under $5,000 ................... 13,567 4,080 30.1%

$5,000 under $10,000.................. 8,587 2,802 32.6%

$10,000 under $25,000................ 13,741 4,526 32.9%

$25,000 under $50,000................ 12,827 4,170 32.5%

$50,000 under $100,000.............. 15,225 4,919 32.3%

$100,000 under $250,000 ............ 32,119 8,303 25.9%

$250,000 under $500,000 ............ 29,921 9,453 31.6%

$500,000 under $2,500,000 ......... 120,328 35,316 29.3%

$2,500,000 or more ..................... 1,126,109 254,458 22.6%

Total ...................................... 1,401,175 336,078

Tax Gap

The tax gap is the difference between what taxpayers should pay and what they actually pay on time. The tax gap, about

$458.0 billion annually based on updated estimates, represents the amount of noncompliance with the tax laws. It is estimated

that $52.0 billion of the gross tax gap will eventually be collected resulting in a net tax gap of $406.0 billion. The IRS

remains committed to finding ways to increase compliance and reduce the tax gap, while minimizing the burden on the vast

majority of taxpayers who pay their taxes accurately and on time.

The tax gap is the aggregate amount of tax (excluding interest and penalties) that is imposed by the tax laws for any

given tax year but is not paid voluntarily and timely. The tax gap arises from three types of noncompliance: not filing

required tax returns on time or at all (the nonfiling gap), underreporting the correct amount of tax on timely filed returns (the

underreporting gap), and not paying on time the full amount reported on timely filed returns (the underpayment gap).

Underreporting of income tax, employment taxes, and other taxes represents 84.5 percent of the gross tax gap. Each instance

of noncompliance by a taxpayer contributes to the tax gap, whether or not the IRS detects it, and whether or not the taxpayer

is even aware of the noncompliance. Some of the tax gap arises from intentional (willful) noncompliance, and some of it

arises from unintentional mistakes.

The collection gap is the cumulative amount of assessed tax, penalties, and interest that has been assessed over many

years, but has not been paid by a certain point in time and which the IRS expects to remain uncollectible. In essence, it

represents the difference between the total balance of unpaid assessments and the net taxes receivable reported on the IRS’

balance sheet. The tax gap and the collection gap are related and overlapping concepts, but they have significant differences.

The collection gap is a cumulative balance sheet concept for a particular point in time, while the tax gap is like an income

statement item for a single year. Moreover, the tax gap estimates include all noncompliance, while the collection gap includes

only amounts that have been assessed (a small portion of all non-compliance).
 OTHER INFORMATION (UNAUDITED) 202

Unmatched Transactions and Balances

Restated

Fiscal Year Fiscal Year

(in millions of dollars) 2017 2016

Change in intragovernmental unmatched balances:

Debt/investment..................................................................... (4,145.3) 4,130.3

Interest payable/receivable ..................................................... - 18.6

Interest payable/receivable-loans and not otherwise classified .. - 6.5

Accounts payable/receivable capital transfers .......................... - (13.4)

Loans payable/receivable ....................................................... - (1.1)

Benefit program contributions payable/receivable..................... 10.6 12.4

Accounts payable/receivable ................................................ (574.9) 167.6

Advances from/to others & deferred credits/prepayments ......... 61.2 (301.7)

Transfers payable/receivable .................................................. (50.2) 14.5

Other assets/liabilities............................................................. - 1,976.1

Fund balance with Treasury.................................................... 399.0 1,074.7

Asset for custodial and non-entity asset/liability........................ - 13,727.7

(4,299.6) 20,812.2

Unmatched intragovernmental transactions:

Federal securities interest revenue/expense-investment 

exchange............................................................................... - (629.2)

Borrowings interest revenue/expense-exchange ...................... - 2.9

Borrowings gains/losses ......................................................... - (9.0)

Non-expenditure transfers-in/out ............................................. (438.4) 2,218.2

Expenditure transfers-in/out .................................................... 688.2 426.9

Transfers-in/out without reimbursement................................... (89.5) 208.3

Imputed financing source/cost................................................. - (0.1)

Benefit program revenue/cost ................................................. (896.3) (906.1)

Non-reciprocating* ................................................................. 8,914.8 (19,150.8)

Revenue and other financing sources* .................................... 297.4 -

Appropriations expended........................................................ 342.4 (361.3)

Appropriations used ............................................................... (342.4) 300.3

Appropriations received/warrants issued.................................. (390.1) 3,296.0

Appropriations of unavailable special or trust fund receipts 

transferred out/in.................................................................... - (3.0)

Custodial and non-entity collections transferred out/in .............. (6,865.6) (11,445.5)

Other taxes and receipts/trust fund warrants ............................ - (2,787.6)

Accrual amounts collected/transferred in.................................. - 5.0

Other..................................................................................... 501.4 (113.7)

1,721.9 (28,948.7)

Unmatched transactions and balances, net ................................ (2,577.7) (8,136.5)

( ) Parentheses indicate a decrease to Net Position.

* The fiscal year 2016 amounts for revenue and other financing sources are included under "Non-reciprocating."
203 OTHER INFORMATION (UNAUDITED) 

The Statement of Operations and Changes in Net Position includes an amount for unmatched transactions and balances

that result from the consolidation of federal reporting entities. Transactions between federal entities must be eliminated in

consolidation to calculate the financial position of the government. Many of the amounts included in the table represent

intragovernmental activity and balances that differed between federal agency trading partners and often totaled significantly

more in the absolute than the net amounts shown. The table also reflects other consolidating adjustments and other

adjustments that contributed to the unmatched transactions and balances amount. In fiscal year 2017, a number of lines in the

unmatched transactions and balances table were adjusted to zero after intragovernmental difference analysis determined they

were immaterial at or below $0.1 billion. The adjustments were added to, subtracted from, gross cost in the Statement of Net

Cost.

Unmatched transactions and balances between federal entities impact not only in the period in which differences

originate but also in the periods where differences are resolved. As a result, it would not be proper to conclude that increases

or decreases in the unmatched amounts shown in the “Unmatched Transactions and Balances” table reflect improvements or

deteriorations in the Government’s ability to resolve intragovernmental transactions. The federal community considers the

identification and accurate reporting of intragovernmental activity a priority.