Projected 2022 gross federal tax gap
The tax gap measures federal tax liabilities not paid voluntarily and on time. This figure is an IRS projection for Tax Year 2022.
Why PRISMA
Disconnected records. PRISMA is one governed system.
Tax, payroll, classification, documentation, insurance, and corrective work often sit apart. PRISMA is a structured preventive operating model for that gap.
Common fragments
- Tax recordsView illustrative case
- PayrollView illustrative case
- Worker classificationView illustrative case
- DocumentationView illustrative case
- InsuranceView illustrative case
- Corrective actionsView illustrative case
Governed sequence
- M1
- M2
- M3
- M4
- M5
- M6
Scale of the problem
Why PRISMA Matters
Small businesses represent nearly half of the U.S. private workforce, yet many operate without structured compliance processes. PRISMA provides a repeatable framework that helps businesses organize responsibilities, reduce preventable risks, and build stronger operational practices.
Primary context
Small businesses in the United States
SBA Office of Advocacy reports 36,207,130 small businesses, about 99.9% of U.S. businesses (2026 FAQ).
People employed by small businesses
SBA Office of Advocacy reports 62.3 million people employed by small businesses (2026 FAQ).
Show additional public context
Additional context
Projected underreporting component
IRS Tax Year 2022 projection for underreporting within the gross tax gap.
Sole-proprietor underreporting segment
Approximately $80 billion in unpaid taxes annually attributed by the IRS to sole proprietors underreporting income, as reported by GAO. This does not imply that all sole proprietors are noncompliant.
Private-sector workers employed by small businesses
SBA Office of Advocacy: small businesses employ 45.9% of private-sector workers (2026 FAQ).
Share of U.S. GDP
SBA Office of Advocacy: small businesses account for 43.5% of GDP (2026 FAQ).
Small-business federal paperwork burden from the IRS
SBA Office of Advocacy: more than 80% of small-business federal paperwork burden comes from the IRS (2026 FAQ).
Operational fragmentation
Fragmented operations vs a governed PRISMA system.
Not every business faces every issue. The comparison shows common patterns and the intended PRISMA model.
Fragmented operations
Disconnected practice
- Tax calendarHeld only by an outside accountant
- Payroll & classificationHandled in separate tools
- Insurance filesStored outside the operating view
- Corrective workStarts after a letter or missed deadline
- DocumentationNo shared owner for completeness
- Year-end cycleFollow-through resets each year
Governed PRISMA system
Intended operating model
- DiagnosticStructured, in plain language
- Risk classificationPreliminary priority for professional review
- GovernanceVisible ownership and reporting cadence
- Linked controlsAcross payroll, tax, documentation, and insurance
- MonitoringOwners, dates, and corrective actions
- Transfer pathToward internal autonomy, subject to professional determination
Six-module architecture
M1 → M6 fixed operating sequence.
Diagnosis precedes classification. Governance precedes implementation. Monitoring precedes transfer review.
- M1
- M2
- M3
- M4
- M5
- M6
- 1/6
Structured Diagnostic
Collect self-reported practice answers in plain language to surface provisional risks and opportunities.
T-01 intake
- 2/6
Risk Classification
Organize findings with a common scoring approach and preliminary priority for professional review.
T-02 scoring, T-09 escalation
- 3/6
Governance Design
Make internal ownership, responsibilities, and reporting cadence visible without implying legal appointment.
T-10 governance and IGO competencies
- 4/6
Implementation
Link controls across payroll, tax records, documentation, insurance, and related administration.
T-03–T-06 control instruments
- 5/6
Monitoring and Corrective Action
Track findings, owners, dates, and corrective work so issues do not drift.
T-07 monitoring, T-08 corrective actions
- 6/6
Transfer and Autonomy
Prepare a structured handoff toward internal autonomy, subject to professional determination.
T-10 transfer conditions, T-11 impact metrics
The sequence is fixed by design so findings, ownership, controls, and follow-through stay connected.
Reusable system
How the operating model applies in practice.
Twelve instruments support repeatable controls. The cases below are pedagogical illustrations, not client results.
Twelve T-series instruments
- T-01
- T-02
- T-03
- T-04
- T-05
- T-06
- T-07
- T-08
- T-09
- T-10
- T-11
- T-12
Swipe to inspect
Illustrative scenario
Filing and payroll deadlines
- Situation
- Filing and payroll deadlines are fragmented across people and tools.
- Exposure
- No single internal owner holds the calendar end to end.
- PRISMA control
- Intended controls: filing calendar, ownership, monthly review, and escalation.
Swipe to inspect
Illustrative scenario
Mixed W-2 and 1099 workforce
- Situation
- The workforce mixes W-2 employees and 1099 contractors.
- Exposure
- Classification records and worker files are spread across providers.
- PRISMA control
- Intended controls: classification review, onboarding controls, and payroll-cycle discipline.
Swipe to inspect
Illustrative scenario
Fragmented records retrieval
- Situation
- Records exist, but they are fragmented and hard to retrieve.
- Exposure
- No written retention practice or shared audit-readiness view.
- PRISMA control
- Intended controls: document audit, retention schedule, custody, and corrective actions.
These scenarios are teaching illustrations only. They are not customer stories, verified results, or adoption claims.
Planned measurement framework
Six planned KPIs for real implementations.
T-11 definitions only. Designed for collection in live implementations. No verified public outcomes here.
KPIPlanned · future
Penalties and interest avoidedPlanned · future
Filing timelinessPlanned · future
Worker-classification accuracyPlanned · future
Audit-readiness scorePlanned · future
Jobs supportedPlanned · future
Autonomy attainmentPlanned · future
Show KPI definitions
Penalties and interest avoided
DefinitionDocumented penalty exposure identified at diagnostic, less penalties actually incurred.
Filing timeliness
DefinitionShare of required federal and state filings and deposits made by their due dates.
Worker-classification accuracy
DefinitionShare of workers whose W-2/1099 classification is documented as consistent with applicable tests.
Audit-readiness score
DefinitionComposite score of documentation completeness and retention against the audit checklist.
Jobs supported
DefinitionEmployees on payroll of served enterprises at implementation and at each annual review.
Autonomy attainment
DefinitionProfessional assessment of whether the enterprise meets transfer conditions for internal autonomy.
Illustrative structure only. No baselines, targets, or aggregate results are shown.
National relevance
Why the problem reaches beyond one business.
Public evidence describes scale and pressure. PRISMA design and planned measurement stay labeled as such.
Small-business scale
SBA Advocacy figures place tens of millions of small businesses and workers at national scale.
Tax-compliance pressure
IRS tax-gap projections show unpaid federal liabilities at national scale.
Workforce classification
W-2 and 1099 accuracy is a planned PRISMA measurement area, not a software legal determination.
Prospective national importance
Future AI-assisted workflows are planned with human-in-the-loop controls and intended NIST RMF alignment. No NIST endorsement is claimed.
Evidence boundaries
What the evidence shows, and what it does not.
Public statistics, internal PRISMA design, and planned metrics stay separate from unverified outcomes.
What the evidence shows
Public evidence
- IRS projections for the federal tax gap and related components
- GAO reporting on sole-proprietor underreporting attributed by the IRS
- SBA Advocacy figures on small-business count, employment, GDP share, and paperwork burden
PRISMA internal design
- Architecture, module sequence, and planned KPI definitions from the endeavor design
What it does not yet show
- Verified PRISMA client outcomes, savings, or penalty avoidance
- Live national adoption, partnership, or certification results
- Automated filings, legal determinations, or autonomous compliance decisions
- Aggregate KPI results from production implementations
Sources
Sources used on this page
Government sources link to public URLs. The PRISMA endeavor document is an internal design source, not a public outcome report.
IRSPublic evidence
The Tax Gap
Internal Revenue Service
irs.gov · irs-the-tax-gap (Opens in a new tab)GAOPublic evidence
Sole Proprietor Compliance: Treasury and IRS Have Opportunities to Reduce the Tax Gap
U.S. Government Accountability Office
gao.gov · gao-24-105281 (Opens in a new tab)SBAPublic evidence
Frequently Asked Questions About Small Business 2026
U.S. Small Business Administration, Office of Advocacy
advocacy.sba.gov · frequently-asked-questions… (Opens in a new tab)PRISMAInternal design
Endeavor Design & National Importance Document
PRISMA Framework
Internal framework source. No public URL.
Professional pathway
Designed to extend beyond one practice
PRISMA’s planned dissemination pathway includes practitioner education, institutional collaboration, bilingual delivery, and standardized measurement.
See the structure, then see what is built.
Review product status for current boundaries, or start the free diagnostic for a provisional view from your own answers.