IRS Projects Growing Tax Gap of $688 Billion For 2021

The IRS estimates the gross tax gap for 2021 is $688 billion, significantly larger than prior projections.
The tax gap is the difference between taxes owed and taxes paid on time to the government.
The IRS aims to boost enforcement and compliance efforts using new funding from the Inflation Reduction Act.
Late payments and enforcement are expected to reduce the 2021 net tax gap to $625 billion.
The tax gap has been increasing steadily, presenting ongoing challenges for the IRS in ensuring taxes are fully paid.