The Internal Revenue Service will be cracking down further on people who fail to file tax returns after earlier efforts didn't do enough, according to a new report.
The
For tax year 2022, the projected gross tax gap — the estimated difference between the amount of tax owed, and the amount paid voluntarily on time — was $696 billion. Approximately $63 billion (9%) of that amount is believed to be due to nonfilers.
"If the IRS does not adequately prioritize nonfilers, it could impact how many taxpayers voluntarily file a return and result in an increase to the tax gap," said the report.
In 2024, the IRS launched an effort to
TIGTA also found that nearly 11,000 cases involving 8,853 taxpayers remained unworked on in the queue of collection cases awaiting further assignment as of June 30, 2025. If the IRS prioritized these cases, TIGTA estimated the IRS could secure a tax return or make a tax assessment on 2,962 cases impacting 2,399 taxpayers. The potential additional tax due would be approximately $90.8 million.
The IRS reduced the backlog of these high-priority nonfiler cases in the queue. Cases can leave the queue when the taxpayers file their tax returns or when the case is assigned to another function for additional actions. As of Dec. 31, 2025, the IRS had 9,463 nonfiler cases in the queue. In addition, TIGTA found that the IRS issued first notices for 4,918 cases affecting 4,748 taxpayers who had already filed a tax return as of June 30, 2025, and should not have been included in the initiative.
"The IRS compromised the right to quality service by including these taxpayers in the initiative and delaying the processing of their tax returns and potentially subjected taxpayers to other burdens," said the report.
TIGTA believes an agencywide approach, executive oversight and dedicated resources could enhance the IRS's Nonfiler Program.
During its review, it found the IRS could improve its reporting on nonfiler enforcement results, and that would enable the management at the IRS's Collection function to fully assess their effectiveness.
TIGTA made six recommendations in the report, including removing the first notice status hold; developing and implementing a comprehensive agencywide strategy supported by executive oversight and dedicating resources to ensure effective coordination across the IRS's nonfiler programs; and updating the Monthly Assessment of Performance report to include metrics such as returns secured and dollars collected for each nonfiler program. The IRS agreed with all of TIGTA's recommendations and plans to take corrective actions.
"We are using analytics, automation and artificial intelligence to identify potential noncompliance earlier and expand the use of reminder notices and other early outreach," wrote Lia Colbert, commissioner of the IRS's Small Business/Self-Employed division, in response to the report. "Providing taxpayers with timely reminders and early outreach encourages voluntary filing, helps taxpayers avoid penalties, and often resolves issues before enforcement actions are needed."
