Watchdog Urges IRS to Make Improvements to Tax Gap Estimates

The IRS should improve its processes for producing estimates of the “tax gap” between taxes owed and taxes paid, the Treasury Inspector General for Tax Administration said in a report released Monday.

The IRS’s most recent tax gap estimates, released last October, found an average annual gross tax gap of $496 billion from 2014 to 2016, and also projected an average annual gross tax gap of $540 billion from 2017 through 2019. Members of Congress have expressed keen interest in tax-gap estimates, and the Biden administration is aiming to use some of the $80 billion the IRS received ...