SQL-Based Invoice Tracking System Could Help Close the $696B U.S. Tax Gap

The U.S. tax gap — the difference between taxes owed and taxes paid on time — amounts to roughly $696 billion annually, with most attributed to underreported business income. A Brazilian accountant and AI graduate student proposes a data-driven fix: assigning every invoice a Unique Transaction Identifier (UTI) to link invoicing, payment, and tax reporting records in a single SQL schema. The model uses three deterministic queries to perform a three-way match, detect missing invoice sequences, and maintain a tamper-evident audit trail via hash-chained records. In a worked example, the system correctly flagged $1,500 in unreported income that a standard lump-sum 1099 comparison would have missed. The author argues the approach requires no new legislation and can be adopted by individual businesses using existing tools, though it would not address deliberate fraud or cash-only transactions.