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Taxpayers underpaid their taxes by $345 billion dollars in 2001 of which $55 billion has been recovered. The majority of that underpayment is the result of underreporting of income with a bit from non-filing and underpayment. “Underreported business income accounted for $109 billion of the total $197 billion in underreported individual income tax, the majority of it coming from non-farm sole proprietors of small businesses. They file income on Schedule C, where there is little or no third-party reporting or withholding.”

$197 billion in underpaid taxes came from individual income tax which would logically mean $148 billion in business income tax was dodged as well. I am curious to know how much of the remaining $290 billion they’ll have recovered by 2008, when they can no longer audit people (individual) for 2001 returns.

Incidentally, the budget deficit in 2005 was $323 billion dollars. Pay your taxes people.

via CNN Money ^[3].