WASHINGTON, Sept. 29 (Nationwide Times) — The federal government loses an estimated $116 billion to $304 billion a year to tax fraud, yet the IRS has no antifraud strategy or designated office to coordinate its response, according to a Government Accountability Office report released Sept. 25, 2026. GAO recommended that the agency address both gaps.
The estimate is a range, not a count of fraud proven in a single year. GAO drew on data and information from 2018 through 2024, including IRS cases involving fraud or potential fraud, possible fraud within the gap between taxes owed and taxes paid, and tax evasion tied to economic activity deliberately hidden from the government. GAO said limits in the available data contribute to the wide range.
For a measure of scale, GAO compared its annual estimate with federal tax liability for tax year 2022, the latest year for which it had a liability estimate. The fraud range equaled about 2% to 6% of that amount, the report said. That comparison does not mean GAO measured precisely how much fraud occurred in 2022.
GAO found that the IRS had neither an antifraud strategy nor a designated entity to coordinate fraud-risk management. The recommendations address how the agency organizes its work, not a finding that the IRS does no fraud enforcement. GAO said the estimate could help Congress and agency officials judge the scale of the problem when deciding how to use fraud-prevention resources.
The IRS partially agreed with both recommendations, according to its response included in the report. In a letter accompanying that response, IRS chief executive officer Frank Bisignano disputed aspects of GAO’s definition of fraud, saying it could encompass other forms of tax noncompliance. GAO listed both recommendations as open.
