(The Center Square) – The federal government loses as much as $304 billion a year to tax fraud, and the IRS has no agency-wide strategy for stopping it, congressional auditors said in a report Friday.
The Government Accountability Office estimated annual losses at $116 billion to $304 billion, the first comprehensive federal estimate of tax fraud losses. Auditors used a Monte Carlo simulation drawing on IRS data from 2018 through 2024, potential fraud inside the tax gap and tax evasion in the shadow economy.
kAmpAA=:65 E@ E2I J62C a_aa[ E96 >@DE C646?E J62C 7@C H9:49 E96 x#$ 92D AF3=:D965 2 AC@;64E:@?[ vp~ AFE E96 C2?86 2E C@F89=J aT E@ eT @7 E96 Sc]e EC:==:@? :? E@E2= ECF6 E2I =:23:=:EJ[ @C `fT E@ cbT @7 E96 Sehe 3:==:@? 8C@DD E2I 82A]k^Am
kAm%96 =@DE C6G6?F6 4@F=5 7F?5 4C:E:42= 8@G6C?>6?E @A6C2E:@?D 2?5 D6CG:46D[ DF49 2D ?2E:@?2= D64FC:EJ @A6C2E:@?D 2?5 962=E9 42C6 7@C G6E6C2?D[ vp~ D2:5] %96 r6?E6C $BF2C6 42=4F=2E65 E92E 2E E96 =@H 6?5 @7 vp~VD C2?86[ E96 =@DD CF?D 23@FE Sb`g >:==:@? 2 52J] pE E96 9:89 6?5[ C@F89=J Sgbb >:==:@?]k^Am
kAmvp~ >256 EH@ C64@>>6?52E:@?Di E92E E96 x#$ 56G6=@A 2?5 5@4F>6?E 2? 2?E:7C2F5 DEC2E68J[ 6:E96C 286?4J\H:56 @C H:E9:? :ED @A6C2E:?8 5:G:D:@?D H:E9 @G6CD:89E 3J 2 56D:8?2E65 2?E:7C2F5 6?E:EJ[ 2?5 E92E :E 56D:8?2E6 DF49 2? 6?E:EJ E@ 4@@C5:?2E6 2?5 @G6CD66 7C2F5 C:D< >2?286>6?E]k^Am
kAm%96 286?4J 92D ?6:E96C[ 2F5:E@CD 7@F?5] %96J 7@F?5 @H?6CD9:A @7 2?E:7C2F5 H@C< 92D 366? =67E E@ :?5:G:5F2= 5:G:D:@?D[ 2?5 E92E E9@D6 5:G:D:@?D 5@ ?@E 92G6 DEC2E68:6D @7 E96:C @H?]k^Am
kAm%96 C6A@CE 4:E6D E96 42D6 @7 r2C= s6=2?@ %@C;283@[ 2 |2C:6EE2[ v6@C8:2[ >2? H9@ 7:=65 EH@ a_a` E2I C6EFC?D FD:?8 5:776C6?E $@4:2= $64FC:EJ ?F>36CD 2?5 52E6D @7 3:CE9[ 4=2:>:?8 =@DD6D 7C@> 2 AFCA@CE65 8@=5 >:?:?8 3FD:?6DD :? v92?2] %96 x#$ :DDF65 9:> 2 C67F?5 @7 >@C6 E92? Sb]b >:==:@?] r@>3:?65 H:E9 E96 AC@4665D @7 2 7C2F5F=6?E A2?56>:4 =@2?[ 96 DA6?E E96 >@?6J @? 2 Sbbb[___ {2>3@C89:?:[ 2 5@H? A2J>6?E @? 2 fa\7@@E J249E 2?5 A=2DE:4 DFC86CJ[ 244@C5:?8 E@ E96 yFDE:46 s6A2CE>6?E] w6 H2D D6?E6?465 :? y2?F2CJ a_ae E@ `c J62CD 2?5 D6G6? >@?E9D :? AC:D@?]k^Am
kAmQp? 2?E:7C2F5 DEC2E68J[ 6:E96C 2E E96 286?4J\H:56 @C 5:G:D:@? =6G6=[ H@F=5 96=A x#$ 4@@C5:?2E6 2?5 4@>>F?:42E6 :ED @G6C2== 2AAC@249 E@ E2I 7C2F5 C:D< >2?286>6?E E@ F=E:>2E6=J >:E:82E6 DF49 C:D<D 2?5 C65F46 C6G6?F6 =@DE E@ 7C2F5[Q vp~ HC@E6] %96 C6A@CE H2D D:8?65 3J #636442 $962[ 5:C64E@C @7 7@C6?D:4 2F5:ED 2?5 :?G6DE:82E:G6 D6CG:46[ 2?5 y2C65 q] $>:E9[ 5:C64E@C @7 2AA=:65 C6D62C49 2?5 >6E9@5D]k^Am
kAm%96 x#$ A2CE:2==J 28C665 H:E9 3@E9 C64@>>6?52E:@?D] x? 2 $6AE] `_ =6EE6C[ E96 286?4J D2:5 :E H@F=5 4@?E:?F6 5@4F>6?E:?8 :ED 2?E:7C2F5 H@C< E9C@F89 6I:DE:?8 AC@8C2>D 2?5 H@F=5 Q4@?D:56C 56G6=@A:?8 2? 286?4J H:56 2?E:7C2F5 DEC2E68J]Q ~? E96 D64@?5 C64@>>6?52E:@?[ :E D2:5 E96 r9:67 %2I r@>A=:2?46 ~77:46C :D 2=C625J E96 C6DA@?D:3=6 6?E:EJ 7@C 4@@C5:?2E:?8 5:G:D:@? E2I 7C2F5 :?:E:2E:G6D[ C:D< 2DD6DD>6?ED[ 4@>>F?:42E:@?D 2?5 7C2F5 2H2C6?6DD 677@CED]k^Am
kAmvp~ C6A@CE65 E92E x#$ @77:4:2=D 925 E@=5 2F5:E@CD 5FC:?8 E96 C6G:6H E92E E96 286?4J 5:5 ?@E 92G6 2 56D:8?2E65 2?E:7C2F5 6?E:EJ 3642FD6 E2I 7C2F5 C:D< >:E:82E:@? H2D E96 C6DA@?D:3:=:EJ @7 :?5:G:5F2= 5:G:D:@?D]k^Am
kAmpF5:E@CD 42==65 :56?E:7J:?8 2? @77:46 Q2 A@D:E:G6 DE6AQ 3FE D2:5 E96 x#$ DE:== 92D E@ 6?DFC6 E92E @77:46 42CC:6D @FE 2?5 5@4F>6?ED E96 7F== D6E @7 C6DA@?D:3:=:E:6D[ H9:49 :?4=F56 56D:8?:?8 2?5 @G6CD66:?8 7C2F5 C:D< >2?286>6?E[ D6CG:?8 2D E96 C6A@D:E@CJ @7 <?@H=6586 @? 7C2F5 C:D<D 2?5 4@?EC@=D 2?5 >2?28:?8 E96 7C2F5 C:D< 2DD6DD>6?E AC@46DD]k^Am
kAmvp~ 255C6DD65 3@E9 C64@>>6?52E:@?D E@ E96 4@>>:DD:@?6C @7 :?E6C?2= C6G6?F6] %96 C6DA@?D6 H2D D:8?65 3J uC2?< y] q:D:8?2?@[ E96 x#$ 49:67 6I64FE:G6 @77:46C]k^Am
kAmq:D:8?2?@ 5:DAFE65 9@H vp~ 7C2>65 E96 AC@3=6>] w6 HC@E6 E92E E96 C6A@CE Q5@6D ?@E DF77:4:6?E=J 5:DE:?8F:D9 7C2F5 H:E9 3C@256C E2IA2J6C ?@?4@>A=:2?46Q 2?5 E92E :?DE2?46D DF49 2D F?56CC6A@CE65 :?4@>6 @C :?244FC2E6 C6A@CE:?8 Q5@ ?@E ?646DD2C:=J >66E E96 =682= E9C6D9@=5 7@C 7C2F5]Qk^Am
kAmq:D:8?2?@Â 2=D@ HC@E6 E92E 492C24E6C:K:?8 E96 286?4JVD 7C2F5 8@G6C?2?46 2D 7C28>6?E65 Q5@6D ?@E C67=64E E96 286?4JVD E2I 4@>A=:2?46 2AAC@249[Q D2J:?8 C6DA@?D:3:=:EJ :D 2AAC@AC:2E6=J 5:DEC:3FE65 3642FD6 7C2F5 C:D<D G2CJ 3J 7F?4E:@? 2?5 6G@=G6 @G6C E:>6]k^Am
kAmvp~ C6;64E65 3@E9 A@:?ED] pF5:E@CD HC@E6 E92E E96:C 6DE:>2E6 6I4=F56D =@DD6D 7C@> ?@?4@>A=:2?46 E92E :D ?@E 7C2F5[ E92E E96 C6A@CE FD6D 2 567:?:E:@? @7 7C2F5 4@?D:DE6?E H:E9 E96 x#$VD @H?[ 2?5 E92E E96 5:DE:?4E:@? :D C67=64E65 :? E96 52E2 4@==64E65 2?5 E96 >@56=:?8 4@?5F4E65] ~? E96 D64@?5[ vp~ D2:5 :ED C6G:6H H2D ?@E =:>:E65 E@ 4C:>:?2= 7C2F5 @C 2 D:?8=6 @77:46[ 2?5 E92E :E 4@==64E65 52E2 @? 4C:>:?2= 7C2F5[ 4:G:= 7C2F5 2?5 :56?E:EJ E967E 7C@> >F=E:A=6 5:G:D:@?D]k^Am
kAm%96 C6A@CE 4C65:ED E96 x#$ H:E9 3=@4<:?8 3:==:@?D :? 7C2F5F=6?E C67F?5D] xED #6EFC? #6G:6H !C@8C2>[ 2? 2FE@>2E65 DJDE6> E92E D4C66?D :?5:G:5F2= C6EFC?D 7@C D:8?D @7 :56?E:EJ E967E 2?5 @E96C C67F?5 7C2F5[ 3=@4<65 23@FE Sgg 3:==:@? :? :?G2=:5 2?5 A@E6?E:2==J 7C2F5F=6?E C67F?5D 7C@> a_`g E9C@F89 a_ac[ 244@C5:?8 E@ E96 286?4J]k^Am
kAmpF5:E@CD 24C@DD E96 x#$ 4=@D65 >@C6 E92? c]g >:==:@? 2F5:ED @G6C E96 D2>6 A6C:@5[ C64@>>6?5:?8 2? 2??F2= 2G6C286 @7 Sac]h 3:==:@? :? 255:E:@?2= E2I 2?5 AC@E64E:?8 2? 2G6C286 @7 Sb]f 3:==:@? 2 J62C :? C6G6?F6 7C@> :>AC@A6C C67F?5 A2J>6?ED] %9@D6 2F5:E 7:8FC6D 4@G6C 2== EJA6D @7 ?@?4@>A=:2?46[ ?@E ;FDE 7C2F5]k^Am
kAmvp~ D2:5 >2?286CD 56G6=@A:?8 2? 2?E:7C2F5 DEC2E68J D9@F=5 H6:89 E96 4@DE @7 ?6H 4@?EC@=D 282:?DE E96 7C2F5 =@DD6D E96J H@F=5 AC6G6?E]k^Am
kAmx#$ DA@<6DA6CD@? y@9? uF=5 C676CC65 %96 r6?E6C $BF2C6 E@ E96 286?4JVD HC:EE6? C6DA@?D6 :? E96 C6A@CE 2?5 E@ q:D:8?2?@VD =6EE6C] w6 5:5 ?@E 2?DH6C BF6DE:@?D 23@FE H96E96C E96 x#$ H:== 56G6=@A 2? 2?E:7C2F5 DEC2E68J @C H96? E96 r9:67 %2I r@>A=:2?46 ~77:46C 2DDF>65 2?E:7C2F5 4@@C5:?2E:@? 5FE:6D]k^Am
kAmvp~ D2:5 :E A6C7@C>65 E96 H@C< 2E E96 :?:E:2E:G6 @7 E96 4@>AEC@==6C 86?6C2=] xE 255C6DD65 E96 C6A@CE E@ E96 $6?2E6 w@>6=2?5 $64FC:EJ 2?5 v@G6C?>6?E2= p772:CD r@>>:EE66 2?5 E96 w@FD6 ~G6CD:89E 2?5 v@G6C?>6?E #67@C> r@>>:EE66[ :?4=F5:?8 E96 ~G6CD:89E DF34@>>:EE66 @? 8@G6C?>6?E @A6C2E:@?D] }6:E96C 4@?8C6DD:@?2= E2I\HC:E:?8 4@>>:EE66[ $6?2E6 u:?2?46 @C w@FD6 (2JD 2?5 |62?D[ H2D 2? 255C6DD66]k^Am
kAmvp~ 5C6H E96 =@H 6?5 @7 :ED C2?86 7C@> 2 4@>3:?65 D:>F=2E:@? @7 x#$ 42D6 52E2 2?5 A@E6?E:2= 7C2F5 :? E96 E2I 82A[ 2?5 E96 9:89 6?5 7C@> 2 D6A2C2E6 6DE:>2E6 @7 E2I 6G2D:@? :? E96 D925@H 64@?@>J] t249 7:8FC6 C6AC6D6?ED E96 @FE6C 3@F?5 @7 E96 >:55=6 h_T @7 G2=F6D :? :ED C6DA64E:G6 5:DEC:3FE:@?]k^Am
