Share with your friends

IRS releases “tax gap” estimates

IRS releases “tax gap” estimates

The IRS today released a new set of “tax gap” estimates on tax years 2011, 2012, and 2013. The gross tax gap is the difference between the true tax liability for a given period and the amount of tax that is paid on time.


Related content

According to today’s IRS release—IR-2019-159—the tax compliance rate is “substantially unchanged” from prior years.

The IRS reported that:

  • The average gross tax gap was estimated at $441 billion per year based on data from tax years 2011, 2012, and 2013. After late payments and enforcement efforts were factored in, the net tax gap was estimated at $381 billion.
  • The tax gap estimates translate to about 83.6%, of taxes paid voluntarily and on time, which is in line with recent levels. The new estimate is essentially unchanged from a revised tax year 2008-2010 estimate of 83.8%.
  • After enforcement efforts are taken into account, the estimated share of taxes eventually paid is 85.8% for both periods (in line with the TY 2001 estimate of 83.7% and the TY 2006 estimate of 82.3%.
  • The IRS currently collects more than $3 trillion annually in taxes, penalties, interest, and user fees. A one percentage-point increase in voluntary compliance would bring in about $30 billion in additional tax receipts.
  • Over the years, tax gap studies have “consistently demonstrated” that third-party reporting significantly raises voluntary compliance, and compliance rises even higher when income payments are also subject to withholding. 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal