Tax Gap and Tax Enforcement (CRS Report for Congress)
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| Release Date |
Revised Nov. 10, 2008 |
| Report Number |
RL33882 |
| Report Type |
Report |
| Authors |
James M. Bickley, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
Recent and projected large federal budget deficits have generated congressionalinterest in the feasibility of raising revenue by reducing the tax gap. The InternalRevenue Service (IRS) defines the gross tax gap as "the difference between theaggregate tax liability imposed by law for a given tax year and the amount of tax thattaxpayers pay voluntarily and timely for that year." "The net gap is the amount of thegross tax gap that remains unpaid after all enforced and other late payments are madefor the tax year." For tax (calendar) year 2001, the IRS estimates a gross tax gap of$345 billion, equal to a noncompliance rate of 16.3%. For the same tax year, IRSenforcement activities, coupled with other late payments, recovered about $55 billionof the gross tax gap, resulting in an estimated net tax gap of $290 billion.
