The Internal Revenue Service estimates Americans paid $688 billion less than they owned during the 2021 tax year, the largest “tax gap” calculated and a jump of more than $110 billion from 2017, CBS News reports. The “tax gap” describes the amount of money that should have been paid based on the tax formulations versus the amount actually paid.
The tax gap stems from a number of reasons, the main one being wealthy Americans using tax shelters and other means–from technically legal to absolutely illegal–to hide money from federal audit. Others come from people who did not file but should have (cough, cough Hunter Biden) and people who filed but did not submit their tax payment.
“This increase in the tax gap underscores the importance of increased IRS compliance efforts on key areas,” IRS Commissioner Danny Werfel said. “These steps are urgent in many ways, including adding more fairness to the tax system, protecting those who pay their taxes and working to combat the tax gap.”