The IRS found that in 2001, $54 billion in employment taxes went unreported, making up a big part of the tax gap. Most of this gap comes from self-employed people not reporting their income. The IRS says that over half of the money they should be paying is not reported. Another reason for the tax gap is that self-employed individuals can avoid paying employment taxes by using certain business structures. This means that people in similar situations can end up paying very different amounts of tax. This not only hurts tax collection but also makes the tax system unfair.