In a stunning, and worrying, revelation, the Internal Revenue Service (IRS) has dropped a fiscal bombshell, exposing an astonishing $688 billion tax gap for the 2021 tax year.

That's a hefty chunk of change that the IRS can’t account for, marking the largest tax shortfall on record. But wait, it gets even more outrageous. The tax gap has swelled by a whopping $192 billion compared to estimates for 2014 to 2016 and a staggering $138 billion when stacked against estimates for 2017 to 2019. Ouch!

Unreported and Late Taxes

Where's all the money hiding, you ask? Well, approximately $542 billion of that $688 billion total is due to sly, underreported income. The rest? Well, it's a cocktail of evasion tactics: people who neglected to file their returns on time or as required ($77 billion) and others who did file but conveniently "forgot" to pay their tax bills in full or on time ($68 billion).

The IRS is taking "urgent" steps to address a record shortfall of $688 billion in taxes owed from 2021. https://t.co/xTWK87hr83

— Denver7 News (@DenverChannel) October 14, 2023

But hold on. We're not factoring in the late payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term and the IRS's vigilant enforcement actions, which are anticipated to churn out an extra $63 billion for the 2021 tax year. This gives us a net tax gap of $625 billion, just in case your calculator melted.

Going After Gig Workers

To tackle this alarming deficit, the IRS is taking drastic measures. Brace yourselves; they're cranking up the audit and enforcement machinery, going full throttle. Additionally, they're gearing up to wrangle in the earnings of gig economy workers, courtesy of those newfangled payment apps like Venmo and PayPal. It's all part of the grand plan for the 2023 tax year, they announced.

In the words of IRS Commissioner Danny Werfel, "This surge in the tax gap serves as a blaring wake-up call for us to bolster IRS compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term efforts in crucial areas. Urgent steps are essential – not just for leveling the playing field in the tax system but also for shielding the dutiful taxpayers and confronting this gigantic tax gap head-on."

But, OK, the gig economy is the place to start … rather than multinational corporations…