1. Inter-American Center of Tax Administration
General Assembly
Quito, Ecuador
Taxpayer Attitude and Tax Administration: Differentiating and Classifying Behaviors
Steve Miller
Deputy Commissioner for Services and Enforcement
Internal Revenue Service
United States of America
April 2011

2. Scope and Content What the Data Shows
Introduction
Scope and Content
What the Data Shows
Legislative/Administrative Actions Taken
Using Third Parties and Third Party Data

3. The Importance of Visibility
What the Data Shows
The Importance of Visibility
Taxpayer Compliance Measurement Program (TCMP)
National Research Program (NRP)

4. Individual Income Tax Underreporting Gap
What the Data Shows…..Tax Year 2001
Individual Income Tax Underreporting Gap
Misreporting of Income and Offsets by “Visibility Categories
Net Misreporting Percentage
Underreporting Tax Gap
I. Amounts subject to
substantial
information reporting
and withholding
II. Amounts subject to
substantial
information reporting
III. Amounts subject to
some
information reporting
IV. Amounts subject to
little or no
information reporting
Based on estimates derived from the TY2001 National Research Program reporting compliance study

5. IRS Organizational Structure
Legislative and Administrative Actions Taken
IRS Organizational Structure
Wage and Investment (W&I)
Small Business/Self-Employed (SBSE)
Large Business and International (LB&I)
Tax Exempt and Gov’t Entities (TEGE)
Enterprise Approaches – Global High Wealth Industry Group

6. Information Reporting Efforts
Legislative and Administrative Actions Taken
Information Reporting Efforts
Government Payments to Contractors
Merchant/Payment Card Reporting
Basis Reporting for Securities Dealers
Payments to Individuals and Corporations
Payments Related to Rental Real Estate
Foreign Account Tax Compliance Act
Uncertain Tax Positions

7. Tax Return Preparer Initiative
Using Third Parties and Third Party Data
Tax Return Preparer Initiative
Registration, testing and continuing education for tax preparers
Letters and/or visits to selected tax return preparers
Goal: increase quality of tax returns

8. Whistleblowers Legislatively mandated
Using Third Parties and Third Party Data
Whistleblowers
Legislatively mandated
Increased number of high dollar cases
Nearly 50% -- large corporate issues

9. Automated Underreporter Process
Using Third Parties and Third Party Data
Automated Underreporter Process
Challenges of more 3rd party data
Supporting IT systems
Business processes that use the data
Many millions of potential cases/year
Resolve discrepancies between 3rd party reporting and taxpayer reporting
Alternative approach: “soft” notice

10. Use of Other Data Key work area:
Using Third Parties and Third Party Data
Use of Other Data
Key work area:
what data to acquire and how to use it
Teams working on matching/analytic tools
Data mining for research, case selection and case audit
Will start with merchant/payment card data

11. Conclusion
The IRS Mission
Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.