WASHINGTON—The U.S. government is losing some $1 trillion in unpaid taxes every year and needs more and consistent Internal Revenue Service funding to go after tax cheats, IRS Commissioner Charles Rettig said on Tuesday. Rettig told the Senate Finance Committee that the “tax gap”—the difference between taxes legally owed and revenue collected—has grown substantially since the last official estimate of a $441 billion annual average from 2011 to 2013. New sources of wealth arising since then, such as trading in cryptocurrencies, were escaping taxation, he said, as was rising foreign-sourced income and abuses of business income passed through as personal income. “If you add those in, I think it would not be outlandish, that the actual tax gap could approach, and possibly exceed $1 trillion” on an annual basis, Rettig said. Rettig said the agency is “outgunned” by increasingly sophisticated tax avoidance schemes, while years of budget cuts have left …