WASHINGTON (AP) — The amount of income tax money owed but not paid to the IRS is expected to increase, the agency said Friday.
For the 2014 to 2016 tax years, the estimated gross “tax gap” increased to $496 billion per year, an increase of more than $58 billion from previous estimates. IRS data released Friday projects that for 2017 to 2019, the estimated average gross tax gap will be $540 billion per year.
Making sure people actually pay their taxes is one of the tax collection agency’s biggest challenges.
“The vast majority of taxpayers are scrambling to pay what they owe on time,” IRS Commissioner Chuck Rettig said in a statement. “Those who don’t pay their fair share ultimately shift the tax burden onto those who do, fueling the tax gap.”
He said the agency would focus, among other things, on “those who avoid their legal responsibilities.”
Biden administration officials have said some of the money from a recent $80 billion injection for the IRS from the so-called Cut Inflation Act will be used to help audit high income earners who do not pay their full tax.
Treasury Secretary Janet Yellen told a Maryland IRS field office in September that the tax gap is estimated to total $7 trillion over the next decade.
“And because the IRS doesn’t have the resources to effectively audit high earners — whose audits are more complex and time-consuming — those high earners are responsible for a disproportionate share of unpaid taxes,” he said. she declared.
Republicans have claimed the IRS will target working-class Americans’ taxes with armed audit agents. These claims are misleading.
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