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$696 billion a year: Taxes owed that never get paid
The IRS projects $696 billion in taxes went unpaid on time for 2022. After enforcement and late payments, $606 billion is projected to go uncollected.
Internal Revenue Service
- Gross tax gap, tax year 2022$696B1
- Net tax gap, after enforcement and late payments$606B1
- From underreported income$539B1
- From people who never filed$63B1
- From taxes reported but not paid$94B1
- Paid voluntarily and on timeAbout 85%1
- Who owes it████████████████
What happened
The IRS estimates how much tax should have been paid and wasn't. For tax year 2022, the latest projection, the gap was $696 billion. Enforcement and late payments bring it down to $606 billion, which the IRS projects will never be collected.
Three-quarters of the gap comes from income that was never reported.
Why nobody caught it
- Underreported income makes up $539 billion of the $696 billion gap.
How sure are we?
An auditor, inspector general or the agency itself estimated the fraud. It's a measured range, not a list of names.
An official IRS projection. The tax gap measures money owed and not paid; it is lost revenue, not spending.
Sources
- IR-2024-262: IRS releases 2022 tax gap projectionsInternal Revenue Service · Oct 10, 2024
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