The Joint Committee on Taxation (JCT) recently released a report entitled “Overview of the Tax Gap.” The tax gap is the difference between taxes paid and taxes owed, and this gap can exist for a few reasons. The IRS estimates that, between tax years 2008 and 2010, the U.S. had an annual gross tax gap of $504 billion.
The individual income tax has the largest tax gap as a percentage of taxes collected. For the purposes of this figure, we separated excise taxes from estate and gift taxes.
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