IRS Tax Compliance Efforts Show Mixed Results

Despite some decreases in 2008, the IRS’s overall level of compliance activities remains higher than in the years immediately after implementation of the IRS Restructuring and Reform Act of 1998.

A new report by the Treasury Inspector General for Tax Administration found, however, that some IRS collection function activities and results declined during 2008 after several years of improved results. The use of liens continued to increase, but the use of levies and seizures decreased during the year. Enforcement revenue collected also decreased, and the total dollar amount of uncollected liabilities increased.

“Continued effort to improve compliance is important for reducing the estimated $345 billion tax gap and maintaining the integrity of the voluntary compliance system,” said TIGTA Inspector General J. Russell George in a statement.

The overall percentage of tax returns examined decreased by almost 3 percent; however, the overall percentage of tax returns examined was almost 12 percent higher than in 1999.

The number of tax returns of individuals examined increased, with almost 82 percent conducted via correspondence examinations. The number of corporate tax returns examined increased by just over 1 percent, a decline of almost 23 percent since 1999.