Tax Administration

Excise Taxes on Sporting Arms, Ammunition and Archery Equipment Gao ID: GGD-86-114FS August 12, 1986

In response to a congressional request, GAO provided information about: (1) the Internal Revenue Service's (IRS) programs for ensuring that manufacturers, producers, and importers of certain sporting goods comply with applicable taxes; (2) IRS and Department of the Treasury accounting procedures for sporting goods excise tax receipts; (3) the accuracy of the U.S. Fish and Wildlife Service's estimates of future tax receipts; and (4) the size of annual fluctuations in the actual amounts of receipts.

GAO found that: (1) IRS ensures compliance with excise taxes through three divisions that audit tax returns, collect delinquent taxes, identify and secure returns from nonfilers, and investigate suspected criminal violations of the tax laws; (2) manufacturers and importers must pay and report excise taxes on certain sports equipment by filing quarterly excise tax returns; (3) IRS processes the tax returns and transfers receipts to a special fund in the Treasury; (4) although the Department of the Interior's excise tax receipts estimates are more accurate than Treasury's, they have been either higher or lower than the actual receipts; (5) Interior is considering using more data on the sports industry to make future estimates because states rely on the estimates for budgeting and planning for wildlife conservation projects; (6) excise tax receipts increased from $24 million in 1966 to $121 million in 1985; and (7) annual receipts declined more in the 5-year period between 1981 and 1985 than in previous 5-year periods.

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