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IRS: 'Tax gap' steady from 2001-06

WASHINGTON, Jan. 6 (UPI) -- U.S. taxpayers' rate of tax liability payment as measured by the so-called tax gap remained steady from 2001 to 2006, the Internal Revenue Service said Friday.

The estimate for 2006 -- the first full update of the report in five years -- concluded the voluntary compliance rate for taxpayers was 83.1 percent, statistically unchanged from a compliance rate of 83.7 percent for the tax year 2001, the IRS said in a release.

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The tax gap is defined as the amount of taxpayers' tax liability that is not paid on time.

The tax gap has three main components -- non-filing, underreporting and underpayment.

Underreporting was the biggest contributing factor to the tax gap in 2006, as it was in 2001.

The IRS said some growth in the tax gap is explained by the use of better data and estimation methods.

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