The tax gap is defined as the amount of tax liability faced by taxpayers that is not paid on time. The Internal Revenue Service collects more than $2 trillion annually in taxes so producing an estimate of the tax gap is a major statistical effort that it undertakes every few years.
This month, the IRS released a new set of tax gap estimates for tax year 2006. The new tax gap estimate represents the first full update of the report in five years, and it shows the nation’s compliance rate is essentially unchanged at about 83 percent from the last review covering tax year 2001.
The net tax gap for 2006 is estimated to be $385 billion. The net tax gap takes into account receipts from enforcement activities and late payments.
– IR-2012-4: IRS Releases New Tax Gap Estimates; Compliance Rates Remain Statistically Unchanged From Previous Study, Jan. 6, 2012
– Tax Gap Map 2006
– Overview Tax Gap for Tax Year 2006
– Summary of Methods Tax Gap
– Additional Materials on the Tax Gap
– Tax Cheaters Cost Law Abiding Taxpayers $385 Billion in a Single Year
Source: Citizens for Tax Justice, January 11, 2012