Democrats question IRS on delayed tax gap estimate

A group of Democratic lawmakers on Monday urged Frank Bisignano, the CEO of the IRS , to answer for why the agency has delayed publication of data that shows how much money owed by taxpayers wasn’t paid on time.

The lawmakers wrote in a letter to Bisignano that the IRS not yet releasing its tax gap estimates for 2023 and 2024 is “hiding the extent to which wealthy taxpayers avoid paying what they owe.”

The IRS has released the tax gap since 1979, with estimates dating to 1973. The agency reports the gross tax gap, which is the total amount in taxes that filers and nonfilers did not pay, and the net tax gap, which accounts for how much the IRS recovers.

The gross and net tax gaps in 2022, the most recent year for which the IRS has released data, were respectively $696 billion and $606 billion, according to the agency . Unpaid income taxes made up nearly 74 percent of the gross tax gap, with unpaid corporate taxes, employment taxes and estate taxes making up the remainder.

In their letter to Bisignano, the group of 43 Democratic lawmakers noted those in the top 10 percent of income were “responsible for” 64 percent of unpaid individual income taxes in 2022, citing that year’s estimate.

By not releasing the tax gaps for subsequent years, after it was scheduled to release data in fall 2025, the IRS is depriving Congress of data that is “crucial for understanding how policymakers might restore its capability to enforce” the country’s tax laws, the lawmakers wrote.

“Your choice to hide the size of the tax gap from the American people is especially egregious in light of the Trump administration’s gutting of the IRS’s enforcement of the nation’s tax laws — threatening to expand the tax gap itself significantly,” they added, referencing the administration’s reduction of the IRS workforce .

“In sum, you appear to be hiding the size of the tax gap from the public while pursuing policies that will make it larger,” the letter continued later.

The Hill has reached out to the IRS for comment.

Sens. Elizabeth Warren (Mass.) and Ron Wyden (Ore.), the top Democrats on the Senate Banking and Finance committees, respectively, were among those who signed on to the letter.

Rep. Mike Thompson (D-Calif.), the ranking member of the House Ways and Means Subcommittee on Tax Policy, and Rep. Nancy Pelosi (D-Calif.) also added their names.

The lawmakers also requested that Bisignano, who leads the Social Security Administration as well, state when the IRS will publish tax gap estimates for 2023 and 2024 by Nov. 15.

They also asked the IRS chief to commit to “not altering the tax methodology in a way that undermines its usefulness to policymakers,” outline “specific methodological changes” the agency is making to the tax gap calculation and provide data on how much pass-throughs, corporations and offshore activities accounted for the tax gap in 2023.