Latest News by Industry
Gap between US income taxes owed and paid is set to keep growing, IRS says
The amount of tax money owed but not paid to the IRS is set to keep growing
NEW YORK (AP) — The amount of tax money owed but not paid to the IRS is set to keep growing, according to projections published by the federal tax collection agency on Thursday.
For tax years 2021 and 2020, the latest to receive such IRS estimates, the projected gross “tax gap” soared to $688 billion and $601 billion, respectively. That marks a significant jump compared to years past — with gross tax gap projections standing at $550 billion for 2017-2019 and $496 billion for 2014-2016.
One of the IRS's biggest challenges is making sure that people actually pay their taxes. While agency data shows that the vast majority of Americans pay their taxes voluntarily and on time, hundreds of billions of dollars in unpaid taxes pile up each year — and tax gap estimates keep getting bigger.
IRS Commissioner Danny Werfel said that the rising tax gap estimates “underscores the importance” of more compliance efforts. Part of the $80 billion the IRS received from the Biden administration’s Inflation Reduction Act is being used for that purpose.