Underground Economy and Tax Gap

In this paper the relation of underground economy and tax gap iniran has been examined. the results show that the undergroundeconomy size is almost 20 percent of gdp in iran. in this researchthree methods of estimation of underground economy size has beenused and combined to achieve a more precise estimation. themethods that have been used are: cash, fuzzy and latent variablemethods. the size of tax gap in iran has been over 30 billion dollarsin recent years. some new payment systems as atm cause change inmoney velocity which makes it necessary that new factors to be takeninto account