IRS Tax Gap Projections Grow to $688 Billion, Agency Estimates

Projections for the tax gap—or the difference between taxes paid versus owed—climbed to $688 billion for the 2021 tax year, the IRS said Thursday.

The Biden administration and some Democrats have pointed to the tax gap as one of the main symptoms of the IRS’s failure to catch tax dodgers. But the new infusion of funds from last year’s Inflation Reduction Act gives the IRS more resources to go after taxpayers in areas that historically have been difficult to enforce, such as corporate income tax, partnerships, digital assets, and overseas activities.

The new tax ...