The IRS attempts to measure the "tax gap"

For the first time in ten years, the IRS has attempted to measure the “tax gap,” the difference between what taxpayers are paying and what they should be paying under the tax law. The gap hasn’t changed much over the years, according to information from IRS Commissioner Koskinen at an April press conference. The net tax gap was $385 billion in 2006, and it was $406 billion over the period from 2008 to 2010. Most of the gap is attributed to underreporting for the federal income tax. In 2006 the voluntary compliance rate was estimated by the IRS at 83.1%, and the rate fell to 81.7% four years later.

Koskinen expressed concern that, given the declines in IRS taxpayer services and the reduction in enforcement actions as a result of budget cuts, the gap may be widening. He concluded with a plea for more IRS funding.

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