The federal tax gap is about $345 billion per year!  Reasons for this gap has been studied by the IRS, GAO and others for decades. Many proposals have been made, yet few have been enacted. President Bush's 2009 budget proposal included 16 tax compliance proposals.  Some of these have been inserted into tax bills as revenue generators. For example, the proposal to require brokers to include stock basis information on 1099s has been included in a few bills, but not yet enacted.

I call this the "slow approach" to reducing the tax gap: study it continuously, generate lots of ideas for reducing the gap, but avoid comprehensive legislation with a plan for reducing it. Political and budget reasons seem to be the cause for the slow approach.  PAYGO has many benefits, but one of them doesn't seem to be to enact legislation that only raises revenue (no new tax breaks). So, we see tax gap proposals come to the table only when revenue is needed to enact new or extended tax breaks.