Tax gap: IRS comes up $385 billion short

You can bet your tax bracket that the IRS will be out for its money this year. I hope people are ready to pay up. I also predict an unprecedented amount of audits this year on people that could probably least afford to pay anymore in taxes.

Close to 15% of federal taxes -- or $385 billion -- went unpaid in 2006, according to new estimates by the IRS.

That's the net tax gap number -- meaning what didn't get paid even after the $65 billion the IRS managed to collect through audits.

And it's the closest proxy policymakers have to the country's annual revenue shortfall, said Mark Luscomb, the principal federal tax analyst at CCH, a tax information publisher.

What's driving the shortfall? A whopping 84% of the total tax gap is due to underreporting of income by corporations, small businesses and individuals.

But underreporting by small businesses and others who report business income on the individual tax return is the biggest single culprit, accounting for more than a quarter of the gap.

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