Irs: Growing Gap Between Us Income Taxes Owed and Paid

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The IRS claimed there is an expected increase in the amount of unpaid income tax money. The expected gross "tax gap" increased to $496 billion annually for tax years 2014 through 2016, an increase of more than $58 billion from earlier projections. According to IRS data published in October, the expected average gross tax deficit from 2017 through 2019 will be $540 billion annually. One of the major issues facing the tax collecting agency is ensuring that people pay their taxes.

“The vast majority of taxpayers strive to pay what they owe on time,” IRS Commissioner Chuck Rettig said in a statement. “Those who do not pay their fair share ultimately shift the tax burden to those people who do, which fuels the tax gap.” He said the agency will, among other things, focus on “those who avoid their legal responsibilities.” Officials from the Biden administration have stated that the so-called Inflation Reduction Act's recent $80 billion infusion for the IRS will be used in part to support audits of high-income earners who do not pay their full tax liability.

At a Maryland IRS field office in September, Treasury Secretary Janet Yellen stated that the expected total size of the tax gap over the following ten years is $7 trillion. "High incomes are accountable for a disproportionate share of delinquent taxes," she added, "and since the IRS could not efficiently audit high earners, whose audits are more difficult and require more time." Republicans have suggested that the IRS will use armed auditing officers to target the taxes of working-class Americans. Those claims are false.