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Shifting shares

In fiscal 1960, business income taxes were 24% of all gross revenue collections; in fiscal 2020, they made up only 7.5% of the total. The
share of employment taxes, 12% in 1960, had tripled by 60 years later, while estate and gift taxes shrank from 1.8% to a 0.5% sliver.

1960 2020
1.8% 2.1% 0.5%

12.2%
 Individual and estate
and trust income taxes
12.9%
49.0%  Business income taxes
36.3% 53.6%
 Excise taxes
 Employment taxes
 Estate and gift taxes
24.2%
7.5%

Source: IRS Data Book, 2020, Table 6, Gross Collections, by Type of Tax, Fiscal Years 1960–2020.

Civil penalties abated Reduction of mortgage interest that issue MCCs report that most
As a percentage of penalties assessed, by deduction taxpayers who receive MCCs and take
type, on individual and fiduciary income The credit can be claimed throughout the mortgage interest credits are not subject
tax returns in fiscal year 2020 (regardless life of the loan, but the credit received to recapture, and some agencies with
of the tax year to which they apply). must reduce any amount of mortgage MCC programs will reimburse taxpayers
interest deducted on Schedule A, Itemized if they incur recapture tax.
Bad check 18.0% Deductions, of Form 1040, U.S. Individual The maximum recapture amount is
Income Tax Return. However, this will adjusted if the taxpayer disposes of the
Delinquency 11.3% likely affect only a small number of residence within nine years of a testing
taxpayers because most taxpayers claim- date (the earlier of when the mortgage
Failure to pay 10.4%
ing the credit also will be claiming the is federally subsidized or the taxpayer is
Fraud 9.7% standard deduction instead of itemizing, liable in whole or in part for its pay-
due to the increase in the standard deduc- ment). If the residence is sold after the
Accuracy 8.0% tion made by the law known as the Tax nine-year testing period, none of the
Cuts and Jobs Act, P.L. 115-97. credit is subject to recapture. How-
Other* 6.7%
ever, if the residence is sold during the
Estimated tax 2.1% Credit recapture nine-year testing period, the recapture
The credit may be subject to recapture amount can be further reduced or
All 8.0% if the taxpayer disposes of the residence. eliminated if the taxpayer does not make
The maximum recapture amount is the significantly more income in the year of
*Failure to supply taxpayer identification number
lesser of 6.25% of the highest principal disposition than in the year of purchase,
and failure to report tip income.
amount of the mortgage loan for which or the taxpayer does not realize a gain
Source: IRS Data Book, 2020, Table 26.
the taxpayer was liable or 50% of the on the sale of the home (Sec. 143(m)).
gain on the sale of the home. Agencies A taxpayer performs the somewhat
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