The last thing most Americans want to think about the day after the deadline for filing income tax returns is a government audit. As a matter of fact, only two of every 100 tax-payers will face an Internal Revenue Service audit of their 1979 returns. This is down from five in 100 a few years ago. But, instead of breathing sighs of relief at the IRS's shrinking ability to keep tabs on who does and who doesn't pay his fair share of taxes, law-abiding taxpayers -- and their elected representatives -- ought to be far more concerned than they are about the estimated $139 billion in income that will go unreported this year.
Economists and tax experts warn that tax cheating is a serious and growing problem. And it is a problem that the country can ill afford to ignore at a time when Congress and the Carter administration are struggling to balance the federal budget and the President is calling on Americans to make sacrifices. The $18 billion in revenue the IRS says the government will be cheated out of this year would be enough to balance the 1980 federal budget. Some economists believe that, if all tax evaders were forced to pay up, the income-tax rate for the rest of the population could be lowered as much as 10 percent.
But as disturbing as the revenue losses are, an even greater cause for concern, in the view of many tax experts, is the threat unchecked cheating poses to America's voluntary and largely successful system of collecting taxes. Until recently the IRS sought to play down the problem, understandably concerned that a widespread public perception that others were not contributing would wreak havoc and possibly even undermine the system.
First and foremost, the IRS needs to beef up its auditing and investigative staff. One estimate is that a doubling of its current 18,500 agents and auditors would more than pay for itself in additional revenue. The White House has resisted IRS pleas to increase its staff, reflecting the Presidenths understandable reluctance to add further to the federal bureaucracy. But in this instance, failure to give the IRS the necessary clout ot do its job appears to be false economizing. IRS officials say an extra dollar spent on auditing returns brings in $4 to $6 in additional revenue.
Moreover, the disposition of some law-makers to tolerate evasion as a form of tax relief needs to be resisted. The IRS ought to be given the manpower to see to it that tax cheating doesn't pay.