Trump Administration Delays IRS Annual Tax Gap Estimate

The Internal Revenue Service has delayed the publication of its 2023 annual tax gap estimate, a metric that calculates the total amount of owed taxes that remain uncollected each year. Originally scheduled for release last fall, the data remains unpublished amid a broader reduction in the agency's budget and workforce under the Trump administration.

Commissioner Frank Bisignano has expressed skepticism toward the traditional tax gap metric. He has instead advocated for a focus on the addressable tax gap, which represents the subset of unpaid taxes the agency can realistically recover. To lead this effort, Bisignano appointed Vincent LaPadula, a former JPMorgan Chase & Company employee, to oversee the agency's work on the issue.

An IRS spokesman stated the agency is currently updating its calculation methodologies. However, the delay comes as a recent inspector general report reveals that revenue from audits fell by more than one-third during the last fiscal year. Critics argue that withholding the data masks the fiscal consequences of downsizing the agency's capacity to audit wealthy taxpayers.