Nearly $300 billion in tax payments is missing — and the government can't find it.
The money comes from the millions of people who haven't filed their tax returns, or been tracked down by the Internal Revenue Service.
The amount of uncollected taxes: $280 billion and rising. And according to the IRS Oversight Board, it is too late to collect those taxes.
"There is a substantial block of funds that are really in excess of 10 years old," said Karen Hastie Williams of the IRS board. "Those trails are stale and it really is uncollectible at this point."
The board says the IRS is understaffed, and now agents are overwhelmed by a new problem — the number of sophisticated new tax scams is exploding, enabling more taxpayers to hide money offshore.
Much of the uncollected money comes from rich people and corporations, though some of it comes from middle-income citizens who cheat on their taxes because they think they won't get caught.
‘I Can Cheat; No One Will Ever Know’
"The number of audits has gone down," says Rep. Earl Pomeroy, D-N.D., of the House IRS Oversight Subcommittee. "I think that as much as anything is giving fuel to this notion that 'I can cheat, no one will ever know ' "
Experts say the number of audits has dropped as Congress has demanded the IRS be more consumer-friendly: The agency has been pressured to devote more resources to answering questions and to use less aggressive tactics to enforce the law.
But some people are taking advantage of that, says Pomeroy.
"Congress has to be very careful that, in protecting the legitimate rights, the important rights of taxpayers, we don't somehow signal that we are protecting the rights of tax cheaters not to pay what they owe," he said.
Some in Congress want to hire private collection agencies to help the IRS hunt down delinquent taxpayers. Under proposed legislation, the bill collectors would keep a healthy percentage of the tax dollars they collect.