GAO estimates annual tax fraud losses at $116B to $304B

The Government Accountability Office estimated in a report released Friday that tax fraud costs the federal government $116 billion to $304 billion a year for 2018 through 2024, or roughly 2 to 6 percent of taxes owed. For tax year 2022, that equaled 17 to 43 percent of the $696 billion gross tax gap against $4.6 trillion in total true tax liability. GAO used Monte Carlo simulation of IRS data, tax-gap fraud potential, and shadow-economy evasion. It found the IRS has no agency-wide antifraud strategy or designated coordinating entity and recommended both. GAO directors Rebecca Shea and Jared B. Smith wrote that an antifraud strategy would help the IRS coordinate its approach and reduce revenue lost to fraud. IRS CEO Frank Bisignano responded that responsibility is appropriately distributed across multiple organizations because fraud risks vary by function and evolve over time. In 2024 the IRS opened 2,600 criminal fraud investigations and assessed 1,400 civil fraud penalties totaling $115 million. The report cited Carl Delano Torjagbo, sentenced in January 2026 after filing two 2021 returns with different Social Security numbers claiming gold-mining losses.