Richest Americans are hiding a huge amount of their income from the IRS: study

The richest 1% of Americans are successfully hiding huge amounts of income from the IRS according to a new study.

"More than 20% of the wealthiest Americans' income isn't being reported to the Internal Revenue Service, according to a new study that calculates U.S. tax evasion is far higher than previously estimated," Bloomberg News reported Monday. "Random audits of the rich can detect some tax evasion, but the study's authors found that the IRS easily misses income hidden in sophisticated ways, including in private businesses and offshore structures. Collecting all unpaid income tax from the top 1% would boost revenue to the U.S. Treasury by $175 billion a year."

And it could be even worse than estimated.

""We stress that our estimates are likely to be conservative with regard to the overall amount of evasion at the top," the study's authors wrote.

The findings also mean income inequality could be worse than thought.

"While many forms of income, including wages, are automatically reported to the IRS and easily uncovered in a basic audit, the profits of private businesses and complex investment partnerships are harder to track," Bloomberg News explained. "The hidden income at the top means that income and wealth inequality could be more skewed than researchers have previously estimated, the authors concluded. The study was conducted by two IRS researchers, John Guyton and Patrick Langetieg, and three professors: Daniel Reck of the London School of Economics, Max Risch of Carnegie Mellon University, and Gabriel Zucman of the University of California at Berkeley."