A first-of-its-kind Government Accountability Office estimate finds tax fraud may reduce federal revenue by roughly 2%–6% of taxes owed; the GAO urges a coordinated anti-fraud strategy inside the IRS.
The GAO recommends the IRS adopt an agency-wide anti-fraud strategy and create a dedicated antifraud entity to coordinate detection and response.
IRS CEO Frank Bisignano disputed parts of the GAO’s approach, saying the agency’s broad fraud definition may include other noncompliance.
Tax fraud may cost us more than $300B annually, GAO finds | Accounting Today Author Follow Us linkedin facebook twitter whatsapp © 2026 Arizent. may be losing more than $300 billion a year in tax revenue to fraud every year, the Government Accountability Office estimated in a report released Friday. The period also included the Covid-19 pandemic, an era in which there were numerous high-profile frauds identified targeting the government.
"Trump's deliberate sabotage of the IRS is making this problem worse, sending audits plunging and opening the door for more fraud. Republicans have made targeting "waste, fraud and abuse" the centerpiece of their plans to lower the debt, now roughly $40 trillion, but their efforts have focused on reducing government spending rather than tax evasion. Meanwhile, the party has stripped away billions in funding for the Internal Revenue Service that Democrats allocated during the Biden administration to improve tax compliance.
IRS chief executive officer Frank Bisignano disputed some of the GAO's findings in a letter included in the report, saying the watchdog agency applied too broad a definition of fraud that could be explained by other common noncompliance issues. The GAO did not draw a link between IRS funding and the agency's ability to detect and fight fraud, instead recommending the tax collector establish an anti-fraud strategy and create an entity within the agency to coordinate efforts. While his billionaire friends continue taking advantage of the tax code, the American people are getting ripped off by a system that's rigged against them." Democrats in 2022 allocated roughly $79 billion in spending to the IRS over a decade with much of it earmarked to boost tax enforcement.
A first-of-its-kind GAO analysis estimates annual federal tax fraud losses at $116 billion to $304 billion. The report said that the IRS needs a coordinated antifraud strategy. The IRS partially agreed with the recommendations but disputed aspects of the report's methodology.
Americans will spend 6.9 billion hours complying with IRS tax filing and reporting requirements in 2026, costing about $387 billion in lost productivity. Including an additional $157 billion in out-of-pocket costs, complying with the federal tax code will cost Americans more than $544 billion this year, over 1.7 percen
While the Trump administration has boasted about uncovering $250 billion of government grift, a lack of transparency makes the figure hard to verify.
A TIGTA report found that IRS delays in resolving identity theft cases cost the government $124.2 million in refund interest from fiscal years 2023 through 2025. The findings echo warnings from National Taxpayer Advocate Erin Collins, who has called the wait times “unconscionable.”
The government recently ruled out a ‘bed tax’, which raised the hackles of Auckland mayor Wayne Brown, who said the proposed revenue-gathering tool was actually a levy. Is he right, and should we care? In line with National’s “ no new taxes ” campaign fixation, in late August Christopher Luxon ruled out implementing an
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