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WASHINGTON (AP) — The Internal Revenue Service is estimating that people and businesses underpaid their taxes by $450 billion in the most recent year studied.

That means they failed to send in 17 percent of the taxes they actually owed.

The data is for 2006, the most recent tax year for which data is available. The IRS estimates it was owed nearly $2.7 trillion in taxes that year.

After IRS audits and other enforcement efforts, non-compliance shrank to 14 percent, leaving the final amount of unpaid taxes at $385 billion.

That’s bigger than the budget deficit that year, which was $248 billion.

The portion of unpaid taxes in 2006 was similar to 2001, the last year the IRS had examined.

(Copyright 2012 by The Associated Press. All Rights Reserved.)

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