Each year, Californians pay an estimated $2 billion less in taxes than they owe, leaving a large and substantial "tax gap" created by these unpaid revenues, according to Steven M. Sheffrin, an economics professor at UC Davis and director of the campus's Center for State and Local Taxation. The single largest source of state government revenue is self-reported income and deductions from individuals and businesses, notes Sheffrin. At a recent symposium on the tax gap, leaders in government, business and education discussed several controversial notions, including more aggressive auditing of individual taxpayers, targeting specific industries for scrutiny and offering incentives for increased compliance. State officials say they recoup much of the unpaid tax through auditing and enforcement efforts. Some symposium participants suggested, however, that enforcement alone won't be enough to close the tax gap. "The Internal Revenue Service is now starting a new round of taxpayer compliance measures where individuals are randomly picked and subjected to intensive review of all records," Sheffrin says. "The information they collect is then used to refine their own auditing computer programs."