TEFRA's proponents emphasized toughening tax enforcement in order to close the so-called "tax gap." This was based on assumption that one in five tax dollars never made it into the government coffers due to unreported income or overstated deductions, expenses, and exemptions. Many of the provisions hit individuals, not businesses: A crackdown on underreporting of tips received by waiters and others who earn tips as part of their income. A requirement for an automatic 10% tax withholding on dividends and interest paid to individuals. A requirement for tax withholding on payments of pensions and annuities. The bill also increased penalties for non-compliance.