The Internal Revenue Service regularly calculates the total amount of money it expects to collect in taxes in a given year, known as the aggregate tax liability — the difference between this number and the amount of money the IRS actually collects is known as the "tax gap." In 2001, the tax gap was $345 billion, and five years later, that figure increased to $450 billion. According to the Tax Policy Center, an overwhelming majority of that amount is not from late filings or back taxes, but from underreporting of taxes filed on time.

In many of these cases, the IRS will act in an attempt to retrieve as much of this money as it possibly can, primarily by way of a wage or bank account levy or seizure of assets. When the IRS believes that you have underreported your income on your tax return, it will usually send you a letter asking you to explain how you think the difference can be reconciled without having to experience a seizure or levy, and it will likely request a response in a very short period of time. Before you respond, know that you do have rights, and also know that you can benefit enormously by enlisting professional support.  We have experience representing individuals facing potentially debilitating collections efforts by the IRS and have helped them to achieve a fair and equitable settlement.

While the United States still continues to linger in a recession, the government has ramped up its efforts to close the enormous and growing tax gap; those who have underreported or failed to file could be exposed to a greater level of scrutiny by the IRS. Nevertheless, as a taxpayer you do have rights. Do not allow yourself to be a victim of an overzealous tax auditor.