federal-revenue

1. September 27, 2026News4 receipts7 min

   GAO estimates the federal government loses $116 billion to $304 billion a year to tax fraud, a range whose two ends come from two different models, and finds the IRS has neither an antifraud strategy nor a designated antifraud entity; the IRS partially agreed with both recommendations.

   GAO-26-107810, published September 25, takes on a gap GAO names itself: there was no comprehensive estimate of federal tax revenue lost to fraud. Its answer is an estimated $116 billion to $304 billion a year, based on data from 2018 through 2024. Applied to tax year 2022, that is approximately 2 to 6 percent of all tax owed and 17 to 43 percent of the gross tax gap. The two ends of the range come from different models: $116 billion is the 5th percentile of a combined model built on IRS case data and the tax gap, whose 95th percentile is $253 billion; $304 billion is the 95th percentile of a separate shadow-economy model. GAO says the method's uncertainty cannot be quantified and the true figure could fall outside the range. It also finds the IRS has no antifraud strategy and no designated antifraud entity, and recommends both. The IRS partially agreed, said the report does not sufficiently distinguish fraud from broader noncompliance, and said it would consider an agency-wide strategy. Both recommendations are open, with no deadline attached.

   Also filed undergaoirstax-fraudfraud-risktax-gap

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