GAO Estimates Annual Tax Fraud Costs U.S. Over $300 Billion, Recommends IRS Anti-Fraud Strategy
The Government Accountability Office (GAO) has released a new estimate indicating that tax fraud could be costing the U.S. federal government more than $300 billion annually in lost tax revenues. Analyzing data from 2018 through 2024, the GAO determined that the annual tax fraud loss ranges between $116 billion and $304 billion. This analysis incorporates IRS fraud cases, potential fraud within the tax gap (taxes owed but not paid), and tax evasion occurring in the informal or shadow economy. The GAO acknowledges that these estimates carry inherent uncertainty but are based on the best available evidence and analytical methods. To combat this significant financial drain, the GAO has put forth two specific recommendations: first, that the IRS develop and document a comprehensive anti-fraud strategy, and second, that the IRS designate a dedicated anti-fraud entity. The IRS, through its Chief Executive Officer Frank Bisignano, partially agreed with these recommendations, disputing the GAO's broad definition o...
