In: Accounting
discuss the increased emphasis the IRS is placing on the subject?
The IRS placed great emphasis on direct enforcement revenue, in part because it is precisely measurable and in part because it showed an indirect deterrent effect that increases compliance, However, there are many techniques other than direct enforcement that increased compliance at the IRS and else-where, Such as better and more targeted tax payer education, better reporting, Voluntary agreements, improved regulations and earlier intervention through notices and phone calls, Since 98% of the revenue comes in without enforcement action, an increase of 1 % in voluntary compliance would be roughly equivalent to 50% increase in enforcement revenue. Also, Enforcement actions are expensive because they are labor intensive and often lengthy, sometimes extending for achieving overall compliances, But it is not the only component and enforcement revenue is not a good measure of success in achieving the strategic goal of services to all taxpayers.