GAO estimates annual federal tax fraud losses at $116bn to $304bn
The Government Accountability Office estimates that federal tax fraud costs $116bn to $304bn annually, the first government-wide estimate of the loss.
The range is wide.
GAO's report says it draws on 2018 through 2024 data, fraud cases, tax-gap estimates, the shadow economy and statistical modelling. Applied to tax year 2022, the range equals about 2% to 6% of estimated federal tax liability.
The report also says the IRS prevented $88bn in invalid and potentially fraudulent refunds from 2018 through 2024. GAO found that the agency lacked a documented antifraud strategy and a designated coordinating entity. It recommended both. The IRS partially agreed and described existing coordination through its compliance leadership.
