Understanding the Tax Gap

The Tax Gap is defined as the difference between the amount of tax imposed by the Tax Code and the amount that is reported and paid with timely filed returns. For the federal government, the gross tax gap is estimated at $345 billion for Tax Year 2001 (after the collection of late and enforced payme...

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Bibliographic Details
Published in:National tax journal 2007-09, Vol.60 (3), p.569-576
Main Authors: Mazur, Mark J., Plumley, Alan H., Plumpley, Alan H.
Format: Article
Language:English
Subjects:
Corporate income taxes
Estimated taxes
Federal taxes
Income estimates
Income tax
Income taxes
Laws, regulations and rules
Operation audits
Payroll taxes
Tax audits
Tax liabilities
Taxpayer compliance
Taxpaying
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Summary:The Tax Gap is defined as the difference between the amount of tax imposed by the Tax Code and the amount that is reported and paid with timely filed returns. For the federal government, the gross tax gap is estimated at $345 billion for Tax Year 2001 (after the collection of late and enforced payments, the net tax gap is estimated at $290 billion for Tax Year 2001). This paper explains the concept of the tax gap, discusses how it is estimated, and points out some limitations with the estimates.
ISSN:0028-0283
1944-7477
DOI:10.17310/ntj.2007.3.14