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Please note!
This fact brief was originally published as an experiment to test the concepts behind fact briefs.
Readers should be aware that while there is still a lot of useful information in fact briefs like this one, not all of them reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date, don't hesitate to contact us at support@gigafact.org.

Does $400 billion in federal taxes go uncollected each year?

By Austin Tannenbaum
YES

The Internal Revenue Service reports that between 2006 and 2013, the most recent period for which data is available, the U.S. government's “tax gap”—the disparity between the taxes the government is owed and the taxes it actually collects—was approximately $400 billion a year.

That sum compares to total income tax collections in 2017 of $1.6 trillion. The bottom 90% of earners paid about $480 billion of that.

Economists Aaron Krupkin and William G. Gale note that one of every six dollars owed in federal taxes goes unpaid and that the gap by 2018 was “plausibly” 70% to 80% of the annual federal budget deficit. They attribute the gap to inadequate funding for tax enforcement agencies, which “could do far more if they had the resources,” and suggest it reflects a fundamental unfairness in the U.S. tax system, given that high earners evade taxes more frequently than middle and low earners.

This fact brief is responsive to conversations such as this one.
ABOUT THE CONTRIBUTOR
Between 2020 and 2022, under close editorial supervision, Gigafact contracted a group of freelance writers and editors to test the concepts for fact briefs and provide inputs to our software development process. We call this effort Gigafact Foundry. Over the course of these two years, Gigafact Foundry writers published over 1500 fact briefs in response to claims they found online. Their important work forms the basis of Gigafact formats and editorial guidelines, and is available to the public on Gigafact.org. Readers should be aware that while there is still a lot of relevant information to be found, not all fact briefs produced by Gigafact Foundry reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date and need to be looked at with fresh eyes, don't hesitate to contact us at support@gigafact.org.
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