The IRS will be attempting to track credit and debit card purchases more closely to spot any discrepancies with the income claimed on tax returns.
A 2008 law, known as the Housing and Economic Recovery Act, mandated that debit and credit card payments be tracked by banks and reported to the IRS. This information was supposed to be compared to the income that business taxpayers report in order to improve compliance on their taxes. The Treasury Department expects this to bring in an extra $10 billion a year in tax revenue.
The Treasury Inspector General for Tax Administration said "improvements must be made if this effort is to function as intended, which is to help reduce the tax gap". The TIGTA made several recommendations to the IRS and the IRS agreed with them and said they are planning on implementing the actions.
