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October 28, 2022 at 05:20 PM
Based on the projections for 2017-2019, the estimated average gross tax gap — the difference between what is owed and the amount paid on time — is projected to be $540 billion per year, the Internal Revenue Service reported Friday.
The associated voluntary compliance rate is projected to be 85.1%, the IRS said.
“The projection of enforced and other late payments is $70 billion, which yields a net tax gap projection of $470 billion,” the IRS said. “The associated non-compliance rate projection is 87.0%.”
The gross tax gap non-filing, underreporting and underpayment component projections for Tax Years 2017-2019 timeframe are $41 billion, $433 billion and $66 billion respectively, the IRS said.
The agency also reported Friday the latest tax gap estimates on tax years 2014 through 2016 show the estimated gross tax gap increased to $496 billion, a rise of over $58 billion from the prior estimate.
The new estimate is a slight improvement from 83.7% in a revised Tax Year 2011-2013 estimate, which dipped slightly from the original estimate released earlier, the IRS said.
After late payments and IRS efforts collected an additional $68 billion, the IRS estimated the net tax gap was $428 billion. “This increase in the tax gap can be attributed to economic growth,” the IRS said.
