Using an IRS estimate from 1984, the U.S. Government Accountability Office estimated that employer misclassification cost the federal government $2.72 billion in 2006. Nearly 60 percent of lost revenue was attributable to misclassified individuals failing to pay income taxes. The remaining losses stemmed from the failure of employers and misclassified workers to pay taxes for Social Security and Medicare and the failure of employers to pay federal unemployment taxes.