Article: Understanding the tax gap.

INTRODUCTION

The term "tax gap" has been used repeatedly by pundits and policy makers. These individuals exhibit a wide range of understanding of the concepts underpinning the tax gap estimates. Our aim with this article is to provide public finance professionals with a basic understanding of the various aspects of the tax gap so these professionals can help shape and guide future debate on this subject. (2)

DEFINING THE TAX GAP

The federal "tax gap" is defined for a given tax year as the difference between the amount of tax owed by taxpayers under the Tax Code and the amount that is actually paid to the federal Treasury on time. This definition seems ...

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