The Tax Gap Now

This is the spread between what the federal government thinks it should collect and what it actually collects. The Joint Committee on Taxation has an Overview of the Tax Gap showing that the tax gap figured in inflation dollars is $504 billion as of 2010 (the last time the tax gap was measured). One of the chief culprits: self-employed individuals who fail to report income, overstate deductions, and don’t pay self-employment tax.