I 
117TH CONGRESS 
1ST SESSION H. R. 1116 
To provide for increased audits, improved technology infrastructure, and in-
creased staff for the Internal Revenue Service for the purpose of reducing 
the tax gap, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 18, 2021 
Mr. DEFAZIO (for himself, Ms. SCHAKOWSKY, Mr. SMITH of Washington, Ms. 
NORTON, Ms. TLAIB, Ms. BONAMICI, Ms. OMAR, Mr. VELA, Ms. 
JAYAPAL, Mr. BEYER, Ms. OCASIO-CORTEZ, Mr. GARAMENDI, Mr. JOHN-
SON of Georgia, Mr. DOGGETT, Mrs. NAPOLITANO, Mr. HASTINGS, Ms. 
SCANLON, Mr. JONES, Mr. MCGOVERN, Mr. GARCI´A of Illinois, Mr. CAR-
SON, Mr. COOPER, Mr. COHEN, Mr. RASKIN, and Mr. KHANNA) intro-
duced the following bill; which was referred to the Committee on Appro-
priations 
A BILL 
To provide for increased audits, improved technology infra-
structure, and increased staff for the Internal Revenue 
Service for the purpose of reducing the tax gap, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘IRS Enhancement and 
Tax Gap Reduction Act of 2021’’. 
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SEC. 2. FINDINGS. 
Congress finds the following: 
(1) According to the Office of the Taxpayer Ad-
vocate, the difference between tax liabilities owed to 
the Internal Revenue Service and those liabilities ac-
tually collected by the IRS, known as the ‘‘tax gap’’, 
averaged roughly $381,000,000,000 annually in un-
paid taxes from 2011 to 2013. 
(2) Recent studies project that the tax gap will 
be a cumulative $7,500,000,000,000 between 2020 
and 2029. 
(3) Between 2010 and 2018, the share of indi-
vidual income tax returns it examined fell by 46 per-
cent, and the share of corporate income tax returns 
it examined fell by 37 percent. 
(4) Individual income taxes are the largest 
group of uncollected taxes before audits, rep-
resenting about $314,000,000,000. 
(5) Estimates suggest that at least 70 percent 
of the tax gap comes from underpayment by the top 
1 percent. 
(6) In 2020, the Treasury’s Inspector General 
for Tax Administration announced that roughly 
880,000 high-income individuals who didn’t file tax 
returns between 2014–2016 failed to pay more than 
$45 billion in owed liabilities. Of those 880,000 
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cases, more than 325,000 were closed without ever 
being entered into the Internal Revenue Service’s 
(IRS) enforcement system, more than 40,000 cases 
were entered but were then subsequently closed 
without ever being worked on, and the remaining 
500,000 cases are ‘‘sitting in one of the collection 
function’s inventory streams and will likely not be 
pursued as resources decline’’. 
(7) In 2011, more than 12 percent of individ-
uals making $1,000,000 or more annually were au-
dited. In 2018, only 3.2 percent of such individuals 
were audited. 
(8) For 8 years in a row, IRS tax enforcement 
has declined. The IRS audited 0.45 percent of per-
sonal income-tax returns in fiscal year 2019, the 
lowest level in at least 4 decades. 
(9) Individuals are about half as likely to be au-
dited now compared to 2010. 
(10) Audit rates for those making $10,000,000 
or more fell from more than 14 percent in 2017 to 
roughly 6.5 percent in 2018. 
(11) Over the course of the past decade, the 
number of income tax returns has increased by 
roughly 9 percent. 
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(12) Audit rates for the largest corporations in 
2011 were more than 90 percent. Now, they are 
closer to 50 percent. 
(13) The corporate share of Federal tax rev-
enue has dropped by more than two-thirds in the 
past 65 years. 
(14) In 2010, corporate taxes accounted for 9 
percent of Federal revenue. 
(15) The Tax Cuts and Jobs Act has pushed 
business taxes to record lows, and, according to the 
Institute on Taxation and Economic Policy, 91 of 
the Fortune 500 companies paid $0 in income tax 
in 2018 despite turning a profit. 
(16) According to a report from the Office of 
the Taxpayer Advocate, the average United States 
household is paying an annual surtax of more than 
$3,000 to subsidize taxpayers who aren’t paying all 
that they owe. 
(17) According to the Congressional Budget Of-
fice, the IRS’s budget is roughly 20 percent below 
its peak 2010 inflation-adjusted budget. 
(18) According to the IRS, the agency has lost 
roughly 30,000 full-time positions since 2010, more 
than 20 percent of its staff. 
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