Tax Administration: Impact of Compliance and Collection Program Declines on Taxpayers

摘要

Because of concerns about declines in Internal Revenue Service's (IRS's) compliance and collection programs, you asked us to assess the declines' overall impact on taxpayers. You asked that in making this assessment, we examine IRS's compliance and collection programs as a whole, recognizing that the amount of unpaid taxes identified by the compliance programs largely determines the workload of the collection programs. Accordingly, we agreed to describe the changes since 1996 in IRS's compliance and collection programs, including the extent of collection deferrals, and the factors contributing to the program changes; determine how the program changes have affected taxpayers, including their compliance with tax laws, the buildup of penalties and interest, and the length of time before collection actions are initiated; and determine how IRS addressed the program changes, including their effect on taxpayers, in its strategic assessments. The preparation of strategic assessments is a first step in IRS's new strategic planning, budgeting, and performance management process. In the assessments, IRS's operating divisions are to provide the commissioner and his senior management team with information on significant trends, issues, and problems facing the divisions and present proposals for addressing them. To measure the change in IRS's compliance and collection programs, we focused on the performance of eight major programs from fiscal years 1996 to 2001. In general, the six compliance programs were designed to (1) check for math errors and unpaid balances during returns processing, (2) determine taxes due from apparent nonfilers detected through computer matching, (3) determine taxes due from apparent underreporters detected through computer matching, (4) audit tax returns filed by individuals, (5) audit tax returns filed by corporations, and (6) audit other tax returns such as estate and gift returns. For taxpayers who are delinquent in paying taxes owed, IRS's collection programs pursue collection through (1) telephone contacts with the taxpayers and (2) personal visits with the taxpayers by IRS field staff. To measure changes across these eight programs, we compiled data on performance indicators that were common to the programs' operations and that, in the aggregate, would provide an overview of the long-term direction of IRS's compliance and collection programs.