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SOI Tax Stats - IRS Tax Compliance Activities

 

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The IRS generally considers three dimensions of tax compliance: filing, payment, and reporting. In 2003, IRS issued a Report to Congress detailing IRS tax compliance activities for 1996-2002. In Fiscal Year 2002, the National Research Program (NRP) was initiated, envisioned as an ongoing, comprehensive effort to measure taxpayers' voluntary compliance with tax law and develop updated methods for identifying returns likely to be noncompliant.

The report is available in Adobe® PDF format, which requires the free Adobe Acrobat® reader to view and print the file. Data tables found on this page are available in Excel® version 4.0. A free Excel® viewer is available for download, if needed.

Report to Congress
The IRS has four main contact programs to identify and help prevent reporting noncompliance. These programs are: examination, document matching, math error, and Automated Substitute for Return (ASFR). The full text of the report to Congress detailing IRS tax compliance activities for 1996-2002, along with summary tables for all four programs are presented below.

• Full text of report (PDF)
• Number of Returns Filed, by Return Type and Examination Class
• Number and Percentage of Compliance Contacts, All Returns
• Number and Percentage of Compliance Contacts, Individual Income Tax Returns
• Number and Percentage of Compliance Contacts, Business and Other Returns

More detailed tables from the Report to Congress  are presented under the program headings below.

Examination Program

The IRS examination or audit program relies on one-on-one examination contact with a taxpayer to detect noncompliant activity.  There are three types of examinations.  Correspondence examinations are done through the mail; field examinations involve face-to-face interaction, typically conducted in a taxpayer's home or business, while office examinations are conducted in IRS offices.  Data for each type of examination are available below.  Statistics for returns claiming the Earned Income Tax Credit (EITC) are also presented separately.
                                    

          Number of Returns Examined
 

• Total examinations, all programs

  All return types    Returns without EITC    Returns with EITC
                      
• Percentage of returns examined, all programs
    All return types     Returns without EITC
                       
• Correspondence examinations only
  All return types     Returns without EITC     Returns with EITC
                                   
• Field examinations only
  All return types     Returns without EITC     Returns with EITC
                    
• Office examinations only
  All return types     Returns without EITC     Returns with EITC
             
          Resources spent on examination activities
• Total examinations, all programs
• Correspondence examinations only
• Field examinations only
• Office examinations only

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Underreporter or Document Matching Program

The document matching or underreporter program matches income, deductions, and credits reported on the tax return with the wage and information return data reported by employers, banks, and credit unions on information returns.  The data presented here are:
           • Total contacts with taxpayers
 

• Percentage of taxpayers contacted
                             
The Math Error program identifies mathematical errors and mismatches of taxpayer information that would result in a tax change on all returns as they are filed.  A reviewer validates items such as primary, secondary, and dependent Social Security Numbers, Child Tax Credit, Earned Income Tax Credit, Rate Reduction Credit, and tax calculations.
                             
The Automated Substitute for Return (ASFR) program uses information returns and historical filing information to look for people who have not filed income tax returns and to create a tax return for them.  It then tries to locate the taxpayer to give them a chance to provide their return voluntarily.

 

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NRP's Individual Reporting Compliance Study Costs
The table below breaks out the costs related to the planning, design, and implementation of examinations for this study.  Costs are shown by the four main IRS organizations involved in the Compliance Study--National Research Program, Wage & Investment, Small Business / Self-Employed, and the Detroit Computing Center.  Dollar amounts and FTEs are shown for labor, supplies, travel, shipping, printing, and training costs.
                           
 

• Study costs

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Issuing Refunds  |  Collecting Revenue

Enforcing Laws  |  Assisting Taxpayers

Managing the System  |  Taxpayer Compliance Research
  

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Page Last Reviewed or Updated: April 14, 2008