The gross tax gap is defined as the difference between estimated “true” tax liability for a given period and the amount of tax that’s actually paid to the IRS on time. The Congressional Budget Office estimates that the U.S. tax gap from 2014 to 2016 averaged $496 billion annually. Because of funding from the Inflation Reduction Act, the IRS says it’s making headway on closing the tax gap. In fact, the IRS reports that it closed nearly 175 delinquent tax cases involving millionaires, generating $38 million in recovered tax revenue. The IRS also identified 100 high-income individuals claiming benefits in Puerto Rico without meeting the residence and source rules involving U.S. possessions.
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