The Economic Policy Institute has published Bridging the Tax Gap: Addressing the Crisis in Federal Tax Administration.  Here is the table of contents:

Here is the Executive Summary:

The ability to finance public services at a low financial cost with minimal social dislocation is a precious national asset. The United States is blessed by a tax system with these attributes—the vast bulk of taxes owed are paid voluntarily and on time. In a $13 trillion economy, our federal government taxing authority costs about $10 billion—less than one dollar out of a thousand—to run. A nation squanders such an asset at its peril, but that is what is happening now.

Compliance with the federal tax system is eroding. The Internal Revenue Service estimates that as much as $350 billion in taxes are not paid voluntarily and timely. On a bare-bones enforcement budget, about $50 billion is eventually recovered. The remaining gap means that tax rates must be higher than necessary to collect the revenue that comes in, and moreover, that such rates penalize the honest taxpayer for the sake of the evader. The absence of a tax cop on the beat demoralizes those who pay their correct amount and encourages evasion, further adding to the enforcement burden and the revenue loss.

Current federal deficit levels are widely recognized to be unsustainable in the long run. The Bush Administration has proposed and ratified spending increases as rapid as any presidential administration in history, and it has added to future spending with a new, unfunded prescription drug benefit under Medicare. In about a dozen years, the Social Security program will begin to require cash transfers from general revenue. Tax cuts of the past four years have made an untenable situation worse, rather than better. Under all plausible circumstances, tax increases will force their way back onto the policy agenda. One important leavening factor will be the willingness of policy makers to improve enforcement of taxes already owed, not just the legislation of literal tax increases.

This book provides a survey of the compliance problem in language the non-expert can understand. We also discuss a broad gamut of remedies. Contributors to this volume include eminent practitioners in the field of tax enforcement, as well as scholars in tax policy.