Tax Administration: New Compliance Research Effort Is on Track, but Important Work Remains
Abstract
The U.S. tax system is based on taxpayers voluntarily complying with the tax laws. However, the Internal Revenue Service (IRS) last measured taxpayers' rate of compliance with the tax laws using 1988 tax returns. IRS uses the compliance rate to help understand the effectiveness of its programs to promote and enforce compliance. IRS also uses the information from its compliance studies as the basis for its audit selection formulas. The intent of the formulas is to target noncompliant returns for audits while avoiding audits of compliant returns. As time has passed since the last compliance study, IRS has become concerned that its ability to understand the effectiveness of its programs and target audits on noncompliant returns has deteriorated, potentially resulting in poorer service to taxpayers, reduced confidence in the fairness of the tax system, and unnecessary audits of compliant taxpayers.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 2002
- Accession Number
- ADA404315
Entities
Organizations
- United States Government Accountability Office