Democrats press IRS for tax gap accounting after midterm election

• Key Insight: Learn why a group of Democratic lawmakers is challenging the IRS over delayed tax data.
• Supporting Data: 64% of unpaid individual income taxes attributed to a specific taxpayer tier.

A group of Senate and House Democrats is pushing the Internal Revenue Service to release long-delayed estimates of the size of the federal government’s tax gap, as the crucial midterm elections take place.

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The letter was sent earlier this week to IRS CEO Frank Bisgnano by Sen. Elizabeth Warren, D-Massachusetts, and Ben Ray Luján, D-New Mexico, who are  both members of the Senate Finance Committee, along with Ron Wyden, D-Oregon, the top Democrat on the committee, plus Rep. Mike Thompson, D-California, the ranking Democrat on the House Ways and Means Subcommittee on Tax Policy, and 43 other Democrats. They criticized Bisignano’s decision to delay publication of the IRS’s annual tax gap estimate, which measures how much taxpayers owe but fail to pay on time. The Democrats warned that withholding this data hides the extent to which wealthy tax dodgers are costing taxpayers billions of dollars and undermines policymakers’ ability to hold tax cheats accountable.

“Your choice to hide the size of the tax gap from the American people is especially egregious in light of the Trump administration’s gutting of the IRS’s enforcement of the nation’s tax laws — threatening to expand the tax gap itself significantly,” wrote the lawmakers.

The group pointed out that the IRS has regularly calculated the tax gap since 1979 and started publishing estimates annually during the Biden administration. Its most recent estimate, published in 2024, found the tax gap totaled $696 billion. The highest-income taxpayers are responsible for a disproportionate share of unpaid taxes, they noted, with the top 10% accounting for 64% of unpaid individual income taxes.

The IRS was originally scheduled to release its next tax gap estimate last fall but has yet to publish it. Last month, an IRS spokesperson said the agency was updating its methodology but did not explain what changes it was considering or when the data would be released.

The delay comes as the Trump administration has weakened tax enforcement, cutting nearly 40% of the staff in the IRS’s Global High Wealth Unit, dismantling the agency’s partnership audit group, and weakening its Criminal Investigations division. Meanwhile, IRS audit revenue fell by one-third, or $3.5 billion, last year.

“In sum, you appear to be hiding the size of the tax gap from the public while pursuing policies that will make it larger,” concluded the lawmakers.

They demanded that the IRS immediately release its latest tax gap estimates and explain any proposed changes to its methodology. The group also requested a breakdown of unpaid taxes attributable to offshore activities, corporations, and individuals at the top of the income distribution. The lawmakers asked Bisgnano for answers to a series of questions by Nov. 15, 2026. 

Democrats in various states around the country are calling for wealth taxes. There are ballot referendums in California, with other states such as Massachusetts, Colorado and Washington also asking voters to weigh in on a millionaire’s surtax, according to the Tax Foundation. 

Another tax research group, the Institute on Taxation and Economic Analysis, released a report last week that found after the two Trump tax cut laws, the Tax Cuts and Jobs Act of 2017 and the One Big Beautiful Bill Act of 2025, the largest profitable corporations are paying the lowest tax rates in at least the past 40 years, with 114 of them paying no taxes at all.

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