In April leading regulatory officials testified before Congress regarding an increased focus on measures to close the estimated net $385 billion tax gap (the actual tax gap as of 2006 has been estimated at $450 billion - with enforcement measures recovering $65 billion).

In particular, James White, The Director of Strategic Issues for the GAO, proposed focusing efforts on enhanced information reporting by third parties to the IRS - meaning leaning more heavily on third party reporters who issue 1099's to service providers. In addition the GAO recommends devoting additional resources to enforcement. Please note that in his testimony Mr. White made it clear that he considers a failure to report when necessary tantamount to enabling fraud - explicitly linking the tax gap to the crime of fraud.

The GAO specifically recommended requiring the reporting of payments made to corporations and service payments made by landlords as two promising areas for generating additional revenue and further shrinking the gap. You will want to pay attention as given ongoing budget deficits and a lack of political will for raising taxes means measures such as these will continue to gain traction and have a strong likelihood of becoming law.