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Tax Gap Estimated At $381.5 Billion
The Department of the Treasury estimates that the net tax gap currently stands at $381.5 billion. This amount is determined by taking the gross tax gap of $441.5 Billion and lowering it by the amount anticipated to be paid through voluntary payments and IRS enforcement activities, $60 Billion.
According to the agency’s fiscal year 2021 Financial Report of the U.S. Government, released February 17, the gross tax gap is generally composed of three elements: non-filing ($39 billion), underreporting ($352 billion), and underpayment ($50 billion).
Individual income tax accounts for the majority of the net tax gap ($271 billion), followed by employment tax ($77 billion), and corporation income tax ($32 billion). The balance is made up of estate and excise tax ($1 billion).