The US Internal Revenue Service is developing fresh strategies to crack down on the estimated $345bn tax gap, but significant challenges still remain according to a recent report.

The Treasury Department's Inspectorate General has claimed that strategies to reduce the tax gap put forward in August last year, dubbed the seven-pronged approach are encouraging but depend on too many vairables according to WebCPA.

'While we are encouraged by the development of a detailed strategy to reduce the tax gap, long-term success will depend on the IRS's ability to address several risk factors, some of which are beyond its control,' said TIGTA Inspector General J. Russell George in a statement.

The seven-pronged approach includes improving electronic filing capabilities, simplifying the law to reduce unintentional errors and improving examination collection and document-matching activities.

Further reading:

Treasury Inspector General for Tax Administrations report

IRS Works on Reducing Tax Gap

Plan to reduce tax gap revised, expanded