The IRS is implementing the first study in 25 years to get to the bottom of the employment tax gap. The study will examine non filers, late filers,and non payers of employment taxes.
It appears that most of the problems are from Schedule C filers (sole proprietors) for under reporting of employment tax liability, which averages, net of the deduction, about 14% on net cash profits.
Here is the IRS's take. (You won't find it anywhere but on this blog):
http://www.irs.gov/pub/irs-utl/tax_gap_facts-figures.pdf
(The picture is of the Andover IRS Office donating $16,937.13 to the Greater Lawrence Community Action Council, Inc. in advance of them spending $96,000,000.00 on their own office building.)
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