Taxes

As Much as $600B May Escape the IRS's Clutches, This Year

Starve the beast!

|

Although you wouldn't know it by the weather, April is fast approaching. And that means in the coming weeks, millions of Americans will be breaking out their W-2s and their favorite tax software to figure out exactly how much money they owe their government. Of course, in an economy as large and complex as America's there are plenty of folks who don't pay exactly what they owe. These people can range from those engaged in illicit activities like drug dealing to legitimate service industry workers, like babysitters, who are paid in cash. The difference between what is legally owed the federal government and what it actually collects in taxes each year is called the "tax gap," which the IRS recently estimated reached $385 billion in 2006. Other studies have placed that figure higher — at upwards of $600 billion.