The link is Report: IRS issued $1B in bad refunds in 2007. Here is the key exerpt:
"The IRS has estimated that the tax gap _ the difference between taxes owed and taxes actually paid _ at about $290 billion a year. Of that, about 57 percent comes from individuals understating incomes or overstating deductions and exemptions."
In both fiscal 2007 and fiscal 2008, the federal government took in about $2.5 trillion. So the amount lost due to cheating is about 11.6% of what is actually collected. It would have more than covered the deficit of $162 billion in fiscal 2007 and it would be about 2/3 of the $450 billion deficit for fiscal 2008.