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Finance Glossary

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Collection Ratio


You'd think after the IRS snagged Al Capone and however many other master criminals in the name of "tax evasion," people would realize that dodging the tax man is futile. Unfortunately this isn't always the case.

The IRS has lots of tools to catch the bad guys. One of them is the collection ratio, which measures the amount of taxes a city or government is supposed to take in versus the money they actually collect. If there's a difference between those two numbers, you can bet some guys in suits are going to be doing some audits and asking some questions.