HMRC resources are being swallowed up by a backlog of tribunals which could take nearly 40 years to clear, according to internal estimates.
The tax office is currently working on more than 20,000 tribunal cases, tying up billions of pounds in potential Treasury revenue.
Internal HMRC estimates claim the backlog would take around 38 years to get through, but this has been denied by department sources.
Officials have warned that the lack of resources is undermining efforts to stamp out tax evasion.
Estimates suggest that by 2015, the number of HMRC staff – in particular trained tax inspectors – will almost halve from the 100,000-strong workforce recorded in 2005.
In the 2010 spending review, the Government pledged almost £1 billion to crack down on tax avoidance and evasion.
An HMRC spokesman said: “We do believe that we are winning the war against avoidance. The Government has closed down many film schemes that were used to avoid tax. Many of the schemes still being marketed just don’t work.
“The law requires those marketing avoidance schemes to give the details to HMRC and we will take firm action to stop any abuse.”
An investigation by The Times has revealed that dozens of wealthy individuals, including medical professionals, footballers and celebrities, use avoidance schemes to cut their tax bills.
Comedian Jimmy Carr hit the headlines last week for allegedly being involved in a legal tax avoidance scheme. He has since apologised, saying he made a “terrible error of judgment”.