Tax evasion

== Tax gap ==
[[File:20220826 Share of unpaid taxes, by income level - area chart, treemap - NYTimes - Dept of Treasury.svg|thumb| U.S. Treasury Department estimates of unpaid taxes indicate that over half of all unpaid taxes are attributable to the top 5% of earners.<ref name=NYTimes_20220826>{{cite news |last1=Lopez |first1=German |last2=Wu |first2=Ashley |title=Conspiracy Theories / How more funding for the I.R.S. became a political firestorm |url=https://www.nytimes.com/2022/08/26/briefing/conspiracy-irs-tax-agency-fraud.html |work=The New York Times |date=August 26, 2022 |archive-url=https://web.archive.org/web/20220826102900/https://www.nytimes.com/2022/08/26/briefing/conspiracy-irs-tax-agency-fraud.html |archive-date=August 26, 2022 |quote=Source: U.S. Department of Treasury; Estimates from 2019 |url-status=live }}</ref>]]
The tax gap describes how much tax should have been raised in relation to much tax is actually raised. The IRS defines the gross tax gap as the difference between the true tax liability for a given year and the taxes actually remitted on time. It comprises the nonfiling gap, the underreporting gap, and the underpayment (or remittance) gap.   

The tax gap is growing mainly because of two factors, the lack of enforcement on the one hand and the lack of compliance on the other hand. The former is mainly rooted in the costly enforcement of the taxation law.<ref>{{Cite journal|last=Sandmo|first=Agnar|date=2005|title=The Theory of Tax Evasion: A Retrospective View|journal=National Tax Journal|volume=58|issue=4|pages=643–663|doi=10.17310/ntj.2005.4.02|hdl=11250/162784|s2cid=4847820|via=JSTOR|hdl-access=free}}</ref> The latter is based on the foundation that tax compliance is costly for individuals as well as firms (tax filling, [[bureaucracy]]), hence not paying taxes would be more economical in their opinion.