TAX FIX: AN IRS PROGRAM TARGETS 10 MILLION NON-FILERS IN U.S.

If non-filing Americans paid their tax bill, they could wipe out more than a fourth of this year's $333.5 billion budget deficit.

"Taxpayers who have dropped out of the tax-filing system owe more than $82 billion," said Paul Kipper of the local Internal Revenue Service, located in the Federal Building, 339 Broadway. "More than 10 million Americans are non-filers."

Kipper, who estimates there are 30,000 to 32,000 non-filers in Missouri, announced plans Tuesday for a "special assistance week" to help non-filers return to the tax system.

"The IRS has launched a nationwide initiative to address a major area of non-compliance dealing with individual taxpayers who have stopped filing or never filed a return," said Kipper.

The non-filers make up about 8.8 percent of taxpayers.

"More than 114 million people filed returns last year," said Kipper. "The percentage of non-filers is small, but it is a growing problem. The number of non-filers has more than doubled over the past three years."

Shirley D. Peterson, IRS commissioner, told the Associated Press Tuesday said the IRS was pulling more than 2,000 agents off their normal jobs auditing returns to crack down on the problem.

Peterson says the shift of 10 percent of the agency's 19,000 auditors and revenue agents will pay off in the long run because when non-filers are caught, part of the bargain is that they agree to stay in the system.

"The estimate from Washington is that non-filers are cheating the government out of at least $7 billion a year," said Nova Felton of the IRS office at St. Louis.

"There are a lot of reasons why people don't file," said Kipper. "Sixty-four percent of non-filers are self-employed individuals who deal primarily in cash. They have been out of the system on the average of four years."

Other reasons for non-filing involved serious personal problems: divorce, death in the family, business failure, unemployment.

A lot of people who fail to file one year are "afraid to come back," said Kipper. "They fear jail or financial ruin as back taxes mount in penalties and interest.

"The IRS wants to help non-filers settle their tax problems," added Kipper. "Starting Monday, a special assistance week for non-filers will be held. Our goal is to assist taxpayers in resolving their tax matters without fear."

The IRS is taking a number of special steps to assist people who want to settle their accounts. These include providing special training for all IRS personnel and making personal assistance available in all IRS offices.

"The personnel will help taxpayers file returns, reconstruct missing records and arrange for payment," said Kipper. "If a taxpayer owes money and can't pay, IRS personnel can work out an installment agreement or determine if an offer-in-compromise is appropriate."

Kipper pointed out, however, that this is not an "amnesty" program.

"Failing to file a federal tax return is no solution to your tax problem," added Kipper. "We want to emphasize that people should not fear coming in."

If a taxpayer voluntarily files delinquent returns without prior contact by the IRS, criminal tax charges are not normally pursued.

He added, however, that taxpayers will be asked to pay the original tax, plus any penalties and interest that apply. "We're not interested in sending people to jail," he said.

The IRS points out, however, that if all else fails, it will turn to its ultimate weapon: criminal prosecution.

Kipper added that taxpayers who are not in the tax system may be missing out on refunds or lose the right to get that refund.

"Surprisingly, about one-fourth of non-filers are due refunds," he said.

During an IRS test of the non-filer program, 73 people responded to a program in Omaha. Twenty of them came into the office and paid up, 36 filed but still owed money, and 27 were due refunds.

During a one-day session at Fort Lauderdale, Fla., previous non-filers handed in their returns and the IRS collected $78,000.

The IRS is able to identify non-filers by checking wage and interest earnings reports from employers and banks, auditing employer returns and using tips from informants.

Kipper urges cooperation on the part of the non-filers. "Don't wait until we contact you," he said. "Come see us."

For additional information or assistance, call IRS Taxpayer Service, 1-800-829-1040.

The Associated Press contributed some information to this story.