The problem of sweatshops in the garment industry has not improved in recent years, largely due to weaknesses in labor laws, fewer enforcement resources, and an increase in the number of employers. Further, sweatshops often fail to comply with federal and state tax laws. This report focuses on the tax issue. GAO identifies (1) the extent to which sweatshops in these industries complied with federal and state tax laws and (2) the efforts and resources that the Internal Revenue Service and states used to correct sweatshop noncompliance.

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