OTHER INFORMATION (UNAUDITED) 206

United States Government

Other Information (Unaudited) for the

Years Ended September 30, 2018, and 2017

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 2016

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 .................... 34,916 55,654 1,903 1,594 55 3.4%

$15,000 under $30,000........ 29,646 655,110 18,587 22,098 627 2.8%

$30,000 under $50,000........ 26,753 1,047,405 58,168 39,151 2,174 5.6%

$50,000 under $100,000...... 33,199 2,367,475 209,856 71,312 6,321 8.9%

$100,000 under $200,000.... 18,858 2,552,481 321,564 135,353 17,052 12.6%

$200,000 under $500,000.... 5,583 1,588,349 308,249 284,497 55,212 19.4%

$500,000 or more................ 1,318 1,959,465 527,721 1,486,696 400,395 26.9%

 Total ............................... 150,273 10,225,939 1,446,048
207 OTHER INFORMATION (UNAUDITED)

Corporate Income Tax Liability for Tax Year 2015

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 ................................ 21,291 6,627 31.1%

$1 under $500............................. 8,606 1,619 18.8%

$500 under $1,000 ...................... 3,942 974 24.7%

$1,000 under $5,000 ................... 13,667 4,273 31.3%

$5,000 under $10,000.................. 8,581 2,793 32.5%

$10,000 under $25,000................ 13,120 4,306 32.8%

$25,000 under $50,000................ 12,890 4,210 32.7%

$50,000 under $100,000.............. 15,296 4,948 32.3%

$100,000 under $250,000............ 25,377 8,017 31.6%

$250,000 under $500,000............ 27,404 8,477 30.9%

$500,000 under $2,500,000 ......... 110,454 32,281 29.2%

$2,500,000 or more ..................... 1,114,453 251,097 22.5%

 Total ...................................... 1,375,081 329,622

Tax Gap

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

estimate of the annual gross tax gap, based on a study released in 2016, is about $458.0 billion for the Tax Year 2008-2010

timeframe. This amount represents the amount of noncompliance with tax laws. This study also estimated that $52.0 billion

of the gross tax gap would 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 IRS’s

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).