A couple of big-dollar stories made big news in February. One tells a story of incredible triumph. The other reveals incredible loss.

In the first, a lottery player strikes it rich with a winning ticket purchased in Nebraska. The ticket holder qualifies for the largest-ever Powerball jackpot: a cool $365 million.

Of course, that prize is before taxes. Ironically, the other story making headlines in the same week shows that a multi-billion dollar tax gap persists. The tax gap tallies the difference between taxes owed and taxes paid. So while one lucky lottery winner will claim a $365 million treasure, the U.S. Treasury falls short of at least $345 billion in unpaid taxes.

Now the tax gap has been a thorn in Uncle Sam’s side for many years. And it is not wholly attributable to tax evasion. In fact, the sheer complexity of the tax code makes compliance a daunting undertaking. Perhaps that’s why a majority of Americans hire a tax preparer to compute and file their tax statements. U.S. taxpayers spent about $265.1 billion in 2005 on tax compliance.

According to the IRS, Americans spend 6.6 billion hours per year filling out tax forms. Many Iowans are elbow-deep in paperwork right about now as they sort and spread out business receipts and earnings documents across their kitchen tables.

The U.S. tax system operates on a unique system of voluntary compliance. The lion’s share of hard-working taxpayers pays in full their fair share. But as the tax gap gnaws a bigger hole in Uncle Sam’s pockets, policymakers have an important obligation to nip the problem in the bud.

Notwithstanding the revenue loss to the Treasury, the tax gap also inflicts serious harm by eroding respect for the rule of law. Tax cheats shortchange our government and place a greater burden on honest taxpayers. A few years ago, the IRS’ national taxpayer advocate told Congress the tax gap adds about $2,000 to the average tax bill.

Federal policymakers must figure out a way to strike the right balance when it comes to tax policy. Tax revenue is necessary to fund essential government services. But taxes also place a layer of burden on worker productivity, business expansion, savings and investment.

The Internal Revenue Service is one side of the equation. Nine years ago, I led a bipartisan, bicameral effort to beef up customer service at the IRS. Honest taxpayers deserve reliable, consistent service. Smarter enforcement and better customer service are crucial for the IRS to serve taxpayers and narrow the tax gap.

The other piece of the tax gap enigma is the cumbersome tax code. For 25 years in a row, I’ve conducted town meetings in all 99 Iowa counties at least once every year. I have not once met even one Iowan who says the federal tax code is just right. But I’ve spoken with plenty who believe the tax code is too complicated and unfair. What’s more, complexity just may feed the breeding ground used by tax cheats to shelter income and shirk their tax obligations.

As the chairman of the U.S. Senate Finance Committee, which legislates federal tax policy, I will continue to work with others in Congress to address the tax gap and consider long-term, permanent reform measures that would simplify our tax system and make the tax code more equitable and transparent.

The good news is our tax-writing committee has earned a long-held reputation for problem-solving that works despite all of the partisanship that can poison policymaking.

The bad news is that I have learned it’s hard to motivate lawmakers to move off the soap box. And that’s especially the case when voters will visit the ballot box later this year to decide one-third of the U.S. Senate and all 435 seats in the U.S. House of Representatives.

Nonetheless, I will continue to make the push in Washington to nip the federal tax gap in the bud before it blooms out of control.