In a stunning, and worrying, revelation, the Internal Revenue Service (IRS) has dropped a fiscal bombshell, exposing an astonishing $688 billion tax gap for the 2021 tax year.

That's a hefty chunk of change that the IRS can’t account for, marking the largest tax shortfall on record. But wait, it gets even more outrageous. The tax gap has swelled by a whopping $192 billion compared to estimates for 2014 to 2016 and a staggering $138 billion when stacked against estimates for 2017 to 2019. Ouch!

Unreported and Late Taxes

Where's all the money hiding, you ask? Well, approximately $542 billion of that $688 billion total is due to sly, underreported income. The rest? Well, it's a cocktail of evasion tactics: people who neglected to file their returns on time or as required ($77 billion) and others who did file but conveniently "forgot" to pay their tax bills in full or on time ($68 billion).

But hold on. We're not factoring in the late payments and the IRS's vigilant enforcement actions, which are anticipated to churn out an extra $63 billion for the 2021 tax year. This gives us a net tax gap of $625 billion, just in case your calculator melted.

Going After Gig Workers

To tackle this alarming deficit, the IRS is taking drastic measures. Brace yourselves; they're cranking up the audit and enforcement machinery, going full throttle. Additionally, they're gearing up to wrangle in the earnings of gig economy workers, courtesy of those newfangled payment apps like Venmo and PayPal. It's all part of the grand plan for the 2023 tax year, they announced.

In the words of IRS Commissioner Danny Werfel, "This surge in the tax gap serves as a blaring wake-up call for us to bolster IRS compliance efforts in crucial areas. Urgent steps are essential – not just for leveling the playing field in the tax system but also for shielding the dutiful taxpayers and confronting this gigantic tax gap head-on."

But, OK, the gig economy is the place to start … rather than multinational corporations…