Part 7/12:
The Rising Tax Gap
A significant motivator for intensified enforcement is the widening tax gap—the difference between taxes owed and taxes collected. Current estimates suggest that the tax gap has grown to approximately $688 billion, indicating substantial revenue lost annually due to underreporting or evasion. As government spending continues to escalate, the IRS faces mounting pressure to increase revenue through auditing.
Commissioner Werfel emphasized that the IRS has not explicitly instructed its agents to target any particular income group, but acknowledged that more frequent audits of lower-earning taxpayers might occur simply due to resource constraints and enforcement priorities.