Direct Marketing Association, The v. Huber

Filing 99

MOTION for Partial Summary Judgment Counts I and II (Commerce Clause) by Defendant Roxy Huber. (Attachments: # 1 Exhibit 1- Fox Decl. & Rep., # 2 Exhibit 2-1 IRS Tax Gap, # 3 Exhibit 2-2 IRS Tax Gap, # 4 Exhibit 2-3 IRS Tax Gap, # 5 Exhibit 2-4 IRS Tax Gap, # 6 Exhibit 2-5 IRS Tax Gap, # 7 Exhibit 2-6 IRS Tax Gap, # 8 Exhibit 2-7 IRS Tax Gap, # 9 Exhibit 2-8 IRS Tax Gap, # 10 Exhibit 3- Saliman Decl., # 11 Exhibit 4- Corjuo Decl., # 12 Exhibit 5- Gable Decl. & Rep., # 13 Exhibit 6- Barry Dep., # 14 Exhibit 7- Stevens Decl., # 15 Exhibit 8- Thompson Decl., # 16 Exhibit 9- Lichtenstein Decl. & Rep., # 17 Exhibit 10- Adler Dep.)(Snyder, Melanie)

individual thinks tWtce about Jailing to reP9rt income or overstate a :deduction if he. or-she 'knows a
twice
failing report income
deduction if he or she knows
neighbor 0r lriend has been a~ited. Stmllarty, if taxpayers are aware that the .IRS·is more active,
or friend has been audited. Similarly, if
are aware
IRS is more
neighbor
voluntary compliance increases.
~olul'1taty CQA'lpliance increases.
The IRS compliance strategy attacks the tax gap
balancing
critical enforcement
The IRS' comJ:)l1ance strategy attacks the tax gap by balancing three clittcal enforcement principles.
Balanced
important
presence and noncompliance
• Coverage. ~alanced audit coverage is impprtant from an IRS presence aM noncompllance
deterrence perspective.
.
deterrence perspectlve~
Yield.
those noncompliant
will
• Yield. It is important that IRS resources address those nonCGmptlant returns that wUl yield the
greatest
impact for
Treasury
9r9!test revenue impacffor the Trea~ury Department.
-

Behavior.
of the
complex
• Intentional Noncompliant BehaVfor.· The larger components otthe tax gap involve more compJex .1
issues andror l.Ihreportea Ihcome that usually require more /p--depth auditS or In flaglJJnt ea.s of
and/or unreported income
in-depth audits
in flagrant cases
tax evasion, criminal fnvestlgation _
evasion,
investigation.

,

Where possible, the IRS'WiIl use low-cost. highly automated systems alld resources-to maintain o[
possible,
IRS will
low-cost,
automated
and resources to
or
increase c0mplianeEfCO\fera~ levels. Many of these systems will not if.lvoIVe- faCe-to-face·
compliance coverage
involve face-to-face
interactions
includes programs such as
Underreporter, Automated
Interactions with taxpayers. This include$ progl'ams such-as Automated Underreport.~r, AutomaJed
Collection
Automated
correspondence
“soft notices.”
COllection System, Auto~ated Substitute .for Return, correspo{1~ence exam, and "soft noti~.·
for
will
a combination low-cost,
face-to-face interactions
The IRS Will use ~ comblnat/en of low-eo.st, highly automated systel)'ls and face-to-fa~ iJilteraetions
autGm~d systems
with taxpayers to addre~ high yield 'and complex compliance i$$ues. These Include field audits,
address h19h
and <fOmpfex
issues.
include
audits,
With
field collecijon contacts, and large corporate audits. Resources Will be devQted to addressjng·major
collection con~J
devoted addressing major
Resource~ will
persistent
noncompliance
interactions With taxpayers.
and persistent areas of nOflcompliilnce through face-to-face Interactions with l;:iXpavers,
To ensure coordination of IRS efforts to address all aspects of the tax gap, the Deputy
IRS
coo~inatfon
to address
t:h,e tax gap, the Deputy
Commissioner for Services and Enforcement has formed an execuj1ve level tax gap committee. 'This
CommIssioner 19r Services and Enforcement ha$formed an executive level tax gap oomtttittee. This
committee analy~es
proper
committee analyzes compliance data '~nd makes recommendations on the fjroper allocation of
data and m~kes
OD
at
compliance resources so that the IRS can maximize its ability to address ·the tax gap components.
the taX
~ the IRS
maximrze
components.
This group is currently quantifying"
This group is Cl,IrrentJy quantifying:
•
•

Coverage rates:
Coverage rates;

•
•

Resource utilization:
Resource util~ation;

•

Return on investment (ROl); and
Return on Investment (ROl): and

•

Effectiveness of compliance programs.
Effectiveness of compfiance programs.

I

, Though it is not feasible to eliminate the tax gap completely, it is possible to maximize the use of
Though It is not feasible to eliminate the tax gap completely, It is possible to maximIze the use of
existing resources to address coverage, yield, and noncompliant behavior better. As resources are
9xfsting resou~ to address cov~rage. yield, and noncompliant behavior better. As rttSOurces are
made available due to shifts in return filing patterns,I or from efficiencies achieved from systemic
made available due to shifts in return filing patterns or from efficienoles achieved from systemic
i changes (both technology and process), ,r&SOurees.will be redirected to address significant
chl\nges (both technolOgy and process), resources will be redirected taddress sIgnificant
components of the tax gap, keeping the factors mentioned above in the proper balance. For
componen~ of the tax gap, keeping th~ factors mentioned above Ih the proper balance. For
example. the IRS cannot simply allocate resources to the highest yielding activities and thereby
e~mple, the IRS eannot slmply allocate reseLirces to the highest yielding activities ancfthereby
sacrifice balanced coverage across all elements of noncompliance. Audit coverage rates and return
sacrifice balanced coverage across air elements of noncompllahce. Audit-coVerage rates and
on investment information is provided in Figures 8 and 9.
on investment Information is provided In Figures 8 and 9.

rerum

34
34
D050
Exh.2

FJgure 8
Figure 8
Taxpayei
FY 2006 Coverage Rafes for Key Taxpayer Categories
RMes

Enforoement
Enforcement Area
COrpOFationsCorporations

Corporations with Assets> $250M
Corporations with Assets $10M - $50M
C orations
$IOM $6QM
..
11OS COrPOrations
11,20S Corporations
' Individuals > $1M
rnd Mdua Is > $1 M
,"
incflvidua{s> $IOGOOO
Individuals"> $100,000
Inivjduals $1OOOQO
Individuals < $100,000
All Indivldu,a1s
Air Individuals
Enpioyment
Employment Tax Returns
Re~ums
Estate Tax with Gross Estate> $SM
Estate·Tax
Gross Estate > SSM

Coverage Rate
35.3%
3&3%
14.2%
142%
0:38%
O38%
5.23%
523%

-

-

Individual IOO0me
Indivlduar Income
Tax

Employment Tax
Estate Tax

.

~",

l.61%
0.89%
UBØ%
0.9&%
O98%
0.11%
O11%
28.12%
Z 12%

.~

., /,~ ;;.1

I'

jcvte 9
FigureS,

Estimated Program Marginal Direct Return on Investment (ROl) for FY ~ Hfring WriiatiVes
EstIrmftad
D~ Retumon
(ROI)
FV 2008 Hiring In~
ROJ

IR$ Program

Lar corporate Exam Program
Small Business Exam and Oflection Ptogram
Individual Dqcument Matching
Automated NonFliing Program
*
11

:
~

s"

31
3:1
9:1
91
14:1

Marginal ROla are ocmputed by applying an asswnecl marg1nallfr factor to the obsend evaraga
ROIS'alS CO(TIputed
pplylng assumed -marglnsllty" far;tor thft Observed ~
return on investment.
mtUmon investment,

exar1lpl~s

Some specific
to
1 'Some sPecific examples of IRS efforts to allocate resources .to target specific noncompliance
of
to all9Cate
te
, attributed to the tax gap Include addressing:
includø addressing;

•

Promoters ofabusive taxavoidance transactions. While thesø pases are time consuming to
tax avoidance
While. these cases
~fl$uming_to
investigate, clvii injunction actiens often lead to the identification of scheme partiolpants
Investigate. clvllinjunctiQn actions
to
9f
paffiolparrtftl
including many small corporate and individual taxpayers. The IRS then allocates tesources
many small cor:porate aAd individual taxpayers..
aUocates res6uroes
to examine and correct the abusive transactinns. ihe IRS also assesses civit penalties as
transactions. The IRS,
civil
to examihe BAd
appropriate aaiast abusive promoters and preparers.
appropriate against
and preparers.

•

Hi’h income nonhiei. Thea IRS has campus Taxpayer Delinquency Investigation (TOl) aM
High
nonnJers. The
ha- qJmpus
s
Oeiinquency lnvesiigatJOll (TOt) and
Automated Substitute for Retuin (A$FR) programs that address nOnfllers. Some high
SubstitUte
Return (A~FR) programs ~ add~' nonfller:s. So~ hlQh..
income cases are not typical and require complex skill to erarnine The IRS aflocates field
ari(f require
skills examine.
allocates
resources to 1nvesgate and reslve these cases.
resolv~ th~se
resources to inves'tjgate

• Offshore actiWty
:e
Of4hore activity.

Taxpayers who engage in offshore activity tor the purposes of
Taxpayers whO
for ttie
underreporting incpue or partiàipating in a tax haven taxation regime must be addresed,
urKSen:eporting Income partICipating
Haven taxal/on regIme must ~ addressed.
The IRS is improving Its ability to ldentify these cages and the specialized sidIls of the
IRS is
its
to identity thøse cases- aod
specialiZed skills
eaminers who handle them.
exaJiliriers who haridle1hem.

35
35
D051
Exh.2

•

return preparers.
preparers
professional, provide valuable
Unscrupulous retum preparers. Most return preparem are professional, provRte va'u~Dle
clients,
service
administration.
effective
senilce to their clients, and are effectiVe advocates for goOd tax adminjstration.
good
Unfortunately,
significant negative effect on
Unfartunately. a few unscrupulous preparers can have a sjgnificant negative-effecton
to
Electronic Return Originators
compliance. The IRS allocates resources fa conduct visits to Eledronic Return"Origlnators
with
pursue preparer
penalizing improper behavior,
(EROs), p.ursue preparer examinations ~ the goal of peoall21ng Improper beha\lio~. and
injunctions
seek civil injunctions and/or criminal hidLc1ments against tfle most eg~ous behavior.
indictments
the
egregious behavior.

•

businesses.
a
likelihood misreporting
Small bpsiffesses. Because research indicates there is -a greater lIkerihood of misrepQrtl~
businesses,
of Form 1040.
IRS plans to
and underreporting by small businesses. the IRS plans,to increase the level ,of Fprm 1040,
Schedule
Sc"edUle C examinations.

Improving audit cufFency and iclentifyit:tglssues for examinallen are key elements oflhe IRS'
identifying issues
of the IRS’
currency
examination
effort to target noncpmptiance, These effo~ often Involye finding ways to streamline
noncompliance.
involve
efforts
effurt
examinations compliant taxpayers, so
more
focused
resources
exar:ninaUpns of Q(uT'lpnant :fa)cpayers. SQ that examination re80lJmes can be focusea on mQre
Efforts to
currency
transparency include:
problematic areas. Efforts tG improve currenCQI and traosparehcy IMiudel

neW

•
,

improve
IRS mandated
taxpayers,
Schedule M-3. To Improve transparency of corporate ta?fPl:iye~, the JRS mandateO a new
large business
Schedule M-3 provides more
Schedule M-3 for large business taxpayers. The Sch&dtile ' M<~ provides-more detail on
book-tax differences, enabling the
identify
and precisely
bOok~tax differen" es. en- plioQ tf1e IRS to idenflfy and focus more quickly al'l~ p~ely on
c
a
those tax returns
issues that
potential compliance risk.
these ~ retul"!'ls and issues. tbat present the highest pot~ntial ,oompUance fisk.

•

is also expanding
Assurance
Compliance Assurance Program. The IRS js -al~ eXpB",dlng the Compliance Assl,Jrance
(CAP). improve
transparency. The CAP program is real
currency
Program (CAP), to Improve both ~rrel1cy and transparency. Th~ CAP'program 18 a 1:01approach
review
in
allows
time apprQlch to compliance rey1ew that aJIows the IRS, working io conjunction with the
return
efficient than a postfiling.
taxpayer. to determine tax rett.em accuracy prior to flllng. CAP is more effICient Uuma:pos~
examination
liability
provides corporations
a given
about
filing examtnatien - as it proviEJes oorporations certainty anout their tax ltabiUty for a gIVen
year
months, rather
return. This provides
years. of filing a
year: within {llanlhs. raUler than years, of-flilng a tax retum. T,h,s Rrovides compliant _
i
taxpayers with
their tax and
allows
reporting positions,
taxpayer&With greater certainty as to their~and financial ~parting positionsj and alloWs
the
resources
more problematic
ttie IRS to focus its examination rasoumes on more ~robJematfe areas.
fOcus
—

•

Pre-Fillng
Pre-Filing
provides taxpayers an
Pre-Filing Agreement. The Pre-.Filing Agreement (PFA) program proViCfes ~yers an
opportunity request
revenue agents examine
potential issues before tax
opportl.!ni'ty to request that revenue-agEmtsexamlne and resolve potentlallsstles befote ta~
work with
returns
explore
{Stums are filed. The IRS continues to eXp'lore other ways to workWitb LMSB taxpayers on
pre-filing basis to address
a pre4illng basis1o-8ddres~ their feqeral tax liability compliance.
federal

•

Leverage Corporate E-fi/e.
identification and the selection
is
Leveragf1 COtpOTfltlt EIi/t!. The IRS IS improving issue identiflcatfo.n and ,the ~rect;i9n for
examination 9f high-risk returns through new mandatory e-flling.. Many ~rporations are
of high-risk
corporations
e-filing.
now req, ired to,file their tax returns electronically arid ' t~ls mandate will eXpand -in future
required to
expand in
and this
oow
u
E-filing
for efficient,
more consistent
tax years. E4illng will provide more consrstetrt treatment and data analysis fer efficieot,
near
identification high-risk issues and
E-filing
Schedule
(lear real time identificaJl"n of tllgh-risk Issues anti taxpayers. E-filing and SefJooule M-3
also
efficiently lower-risk taxpayers
IRS to identify
together alsO allow the IRS te Identity and exclude more effiCiently Iower-risk ta)(payers
full examinations.
from fuJi examInations.

36
D052
Exh.2

I

•

Fcnn 941 nonfilers. The IRS)s ex~andln~ employment tax oompfiance efforts through
matching Infurmation retums fited with the Social Security Administration to the filing of
related employment tax retums.

•

Form 1120-5 complIance. Tt"!e IRS Is increasing reviews of invalid S corporation refums
and ttteir shareholders. Entities that dQ not have valid electfons, and tflelrshareholders
ret",ms, will be adjusted to r.eflect the proper tax effect.

•

Fed/State referralS. The IRS aptlvety pursues leads obtained throUgh Information sharing
with the states, as well as Initiates exam,natiOns based on oulcemes of state audits.

U

0

RJ

q

L

:r
cfl-

g

o

ol

ø

g
n
a
g

c

g

h

x

<

._l_.(

ø

:z;
0

Q

-z
ø

G

9’

-%

C

cCê
x

(nlemaflonal support The IRS is e-xpanding investigatiens .ofindMduals who report
income- to Puerto Rico but fail to file a Form 1040PR fa report social security" begi!) or end
bona fide residence in a U.S. possession, and request to limit partnership withholdrhg from /
foreign sources.
.

fl LW! h
jr P H1
iii
1-4 Hi

•

S

I

I

Additional compliance initlativ~s in process on IRS campuses Include:

, IRS employees play-a critical role. in the effort10 improve compllarle& in terms of both. taxpayer
serVice and enfor:cemel'il In addition to Implementing elements of any strategy to Improve
! compliance, IRS empJqyees also serve as a,SQuroa for developing thEise elements in the fltst
place. In O{der to ~hsure that the IRS' workforce ,is responSiVe tQ the need to Improve
complJanGe, the IRS recently pUbliShed regulations that remove limitations on the use of
quantlly measures In evaluating the ~rformance of.. or imposing or suggesting goals for IRS
organizational units. These regulations will improve ac60ufltaBIlIty while not changlng current
provisions that bar the use of performance measures based on quantity. measures when
i evaJuating employees' performance.
!

. There are six s~ific initiatives irt tt"!e FY 2008 Budget request that are aim~ at signifi~nt/y
Improwlng compliance activities. CollecliVeiythe.se Initiatfv8$ should generate an additional
~ $699 million in revenue when all Of the new nires reach full potential in FY 2010. These
initietNes will'

•

Improve,compliance among smsH business and self-employed taxpayelS In tfIifJ BI8me"ts
orrePfJrtJ'rIU, nUft{h and payment compliance. This funding will be allooa~ed fur increasing
,audits of high-risk tax retums, collecting unpaid taxes, and Investigating for possible
ol'iminal referral persons who have 8VQded taxeS.

•

Increase exam n(llion coverage for large. complex busIness returns., fore/gn resk1ents~ and
smaller corporations with significant I"temational. at;tivfry. Using Information from Form
1120. Sch~\.."e M-3 and enhanced data resul~ng from mandatory e--fillng,
Inlttatlve Will
address osM .arising from th&! tapld Increase In globalization, and the related in~ in
foreign busr~ actlvltx and multinaJfonal transactK)n6 where the potential for
n
noncompliance issigniflCa, t. Improved b~siness ,P~ a/Qng with this funding wilJ
allow IRS to maintain Its ~ention to the very largest businesses '\¥hile expanding the
overan coverage rate for large. corporate and flow-through retU(T1S "rom 7.9 percent to 8.2
f
parcel'lt In FY 2008.

C)

furs

37
D053
Exh.2

•

inclusion document matching a
Expand document matching in existing sites and the incfusion of d~ume"t matt;!Jipg at 8c
within
Automated
new site.
n6W site, This enforcement initiative will increase coverage withit:t the A\.IlOmated

resulting in
document matching program, resuttfrls jn an increase in AUR
Underreporter
UndeFfep<>.rter (AUR) d_
ooument
~UR
In addition.
FY
million FY 2007 2.64
closures from 2.05 milllen in FY. 2007 to i.54 million in F¥ 2010. IF} addition, a new
campus. The
established the IRS’ Kansas
program will
document matching program wm be ~st8blisheq at U1e IRS' KanS{ts City camp~s. The
additional
is
establishment of this new AUR site Is estimated to result in over $183 million in addit.lonal
2010.
per
enforcement revenue pet year beginning in FY 2010f
be,Qlnnlng
•

the Automated Substitute for Return
Increase individual filing compliance through the,Automated 5ubstitJJte forRetum Refund
IncreasejndlvldtJalfillngcomelJpnee
current-year refunds of
minimize revenue loss
Hold Program., This will minjmile reVenue loss by holding the cUrr9"
Program.
nt-year
returns and are
taxpayers who
~xpayers wHo are delinquent in filing individuafincome tax returns- ana are·expected to
flllng individual income
result
additional taxes.
owe additional1axes. It is estimated that this initiative will ~5ult in securing more than
~timaled
returns in
2008.
90,000
90 000 delinquent retl-lms In FY 2'Q08.

•

third
Improve tax-exempt
IfTJprove IBx~,Xel(1pt entity compliance bypreventingthe misl(.ss ()fsuc(j entities by lliird,
qpmpliance by pmventihg the misuse ofsuch enlides
increasing
purposes. ThIs
pa#ies far tax avoidance other
parties for lax avoIdance or ~~ unintended pUmCS8S\ Thl~ funding will aid in iMreasing
1,700(6 ~rcent)
contacts
the number of TEGE compliance GOrttaots by 1,100 (6 percent) and employee plan/exempt
employ"~
2010.
organization determinations closures by over 9\000 (8 percent) annually by FY 2'()1,P.
9,000 peroent)
organizatlon

•

increase cnminal
investiiatians, which Wl71 aggressively attamr-abusive
Increase griminal tax inv6$(igations Whloh. will aggreSsiYely attack abusive tax schemes,
sch8nieS~
fraud, nonli/elS,
employment tax fraud. TlJese
corporate ftaQd, non filers, and empJoymenttax ffaud. These investigations will also
tax
address other taX and financial crimes identified through Bank SSCr8c:y Act related
Secrecy
case development efforts
on
examinations
include
eXalTiihalions and ~se development efforts, which incluae an emphasis 00- the fraud
frau<1
referral program,
refemtl program.
j

In addition to these ini, aUves. the IRS is ~inning to realize. benefits from the Privat9r~bt
beginning realize
initiatives,
U
th~ Private Debt
Pursuant to Congressional au~~orization,
Collection program. Pursuaritto Cong1:es~io,nal authorization, taxpayers receive the same
COli~ctlon
including
treatment
private collection agen~res
that they would
the
treatn1e}lt from ~rivate coUecti~n agencies (PCAs) thatffieywou(d from the IRS, Incjudlng
Advocate Service.
work cases
r access to the Taxpayer Aavocats,ServlC8. The PCAs only wOrk ~ses where the taxpayer
otherwise. Ninetycollect
not dispute
liability
not
does 091 dispute"the iiability and coJl~ money the IRS could not collect otherwise, Ninety-satisfaction
percent of
seven percent,of the taxpayers who responded to the IRS customer satisfaction survey
by
service
satisfied
regarding contact l)y a PCA were ~tlsfied with the seNlce received.
compliance
joint IRS/Taxpayer Ad¥ocate'
is also a
Improving eornpliance in the qilsb economy Is als"O a focus. A ~int IRSJ:fa~payer Advocate
cash
alternatives forltnprovi"ng compliance in
of the tax gap.
team is exploring a'ftematives for improving compll~nGe In this portion Qfthe laX t;Jap. The team
internal
data
is
multiple existing
has reviewed daU! from mlJltipie eXIsting studies and Is surveying both inlemal and external
for potential
sources fer potentfa', recommendations.
...
adhere
Another focus is to ensure that attorneys, accountants and other fax practitioners adhere to
tax
accountants,
nother foCus
high professional standards. The Offloe of Professi9nal Respansibility (OPR) recently obtained
Office Professional Responsibility
wholesale review practitioner taX
to providing statistical
patterns.
a Wbolesale revlew of 'pfi8ctitioner tax filing pattems. In addition tQprovidi~ a star leal
review identified practitioners whose ~rsonal
analysis of practitlonertax noncompliance. this re\rllew identified praCtitioners Whose personal
practitioner tax noncompliance,
analysis
in
filing
230
filihg patterns were problematic. Circular 236 enforcement action rh this area has had the
h~had
problematic.
delinquent practitioner
collateral effect prompting well over
percent
coliater~1 affect of prornpting 'well pver 75 percent of the delinquenl practitiOner returns to be
after
enforcement effort reinforces the
filed after contact by OPR. This enforoementeffort reiriforcesihe message that OPR
thatOPR
considers
expects tax professionals
cansideis tax compliance to be an important matter and ei~ta£proJessiO,nais to remain
,
>
compliant.
oom pita nt.

38
D054
Exh.2

I;

OPR is also a participant and lead facilitator ofa new return p.reparer strategy designed to
ma· lmize resources and covtlrage in the noncompliant tax preparer arena. The ServigeYfide ,
x
Enforcement Preparer Strategy is comprised of a te~m rep~nting all functions involved with
the ~tum preparer/parallel ;nvestlgation workload. In addition to an annual planning 'meetlng
: that has taken place. monthly c.onfer:ence calls are conducted ampng all members to
coordinate between functions to ensure issues and enforcement actions·such as Injunetions
and penalties are conSistent, timely. and effective .

Ia

$

I

a

I

sg

. Criminal Investigation (01) supports compliance Initfatives and sends a strong public message
by Investigating egregious tax 'ev.aders, chronic noncompliance, promoters and particigarrtscin
abUSive schemes, employmenltax evasion, hlgh-lncome.nonfilers. ~hd unscruputous 'retum
preparers. IRS CI has One of the highest convlctien rates In federal Jaw enforcement. Over 19
percent of col)victed offenders are .sentenGed to priSGn terms..averaging 22 months.

•

I

a

H

H
IS

ft

Oost sharing;

CD

•

,

Foreign earnings repatriation·

•

Hybrid instruments; and

•

-{

S

1

I

ff

0
S

Section 936 ~X1t strategies;

.

Abusive.foreign 1a)(' credit gS'ne'rators; .

,

I
IW;

•

Li
Li

Hi

; To adaress offsh?re and aroSs-boraer compliance risks (through enfo~er:rt and by issuing
guidance), the IRS has formed issUe Management Teams In the (ollowing -areas:

Transfer pricing.

, Tax Treatres an~ Tax Infdrmalion Exchange Agreements (TIEAs) are two additfonallmportanf
tools in ~dresslng Snd enhancing international compliance. through the exchange Of _
iFlfdrm~60n with other national ~x auth~ritles. Through TIEAs aod the Exchange of
P'~
Information Arti~Je of Tax Treaties, the IRS Is ·able to devetw. cross-boroer information·to
identify and address abu~ive transact~ons for cMI ana criminal purposes-.

, Americans seem less tolemnt of.ta~ ~ heating than tt),ey did only a few years: ago and ategenerally supportive of IRS CQf11pliance activiUes agalnst~)( scofflaws. According to a 2003
Roper poll conducted for the IRS Oversight Board.-81 pe,rcent of Americans said it Is
unacceptable to cheat 00 Income taxes. A 2005 ~urv~ ~tne IRS Oversight BQarq shows
that the number Is now 88 pe~n~ as demonstrated In Figut'$ 10.

i

(

CD

(A)

39

D055
Exh.2

Figure
Figare 10
Percent of TIIXfIIIY'I"I OppoHd 10 Cheating
Percem. Taxpayers Opposed to
-'

-'"
1999

...

..

'"
2003

22

2Q0
2Q05

Y..r
Year

rRS
Attitude Surveys
Source: IRS Oversight Board Taxpayer Attittide Survey

In addition, attitudinal support for compliance remains high as illustrated by the following
statistics:
• , Nearly th~ out. at four taxpayers agree that It Is everyone’s civic dutY to pay their fair
it is everyone!s civi~ duty pay.th$lr
N.earty three out of
share taxes.
,share. of f$ce$.
•

in evety three Amerlcqps
it Is everyo .a's personal
Nearly one In eVe three. Americans (30 percent) agree that It is everyone’s p;ersonal
Neatly'
aQ,ree
from 2004:
responsibility te
who
their
point
-.responsll>lIiW to report anyone Who cheats on flelr taxes, a six pOint increase ifori1 2004
~
and 11 point increase from 2003.
~d 11 polnHncrease-trom'2<:lOS.

•

target large corporations
Although the public continues to feel strongly that the 1S should '~r:get lare COQlOf1tial'ls
A1th049h the'publ~ oontinues
th~ IRS
comply, In~ Ing numbers feel that is
and those athigh-ineome levels wt)a c:1Q
and’4hose at high-incomø levels who do not C(i)r:npfy~ increasing nUf!lbersJeel tl')at it is
inpodantta el'!su~ conpliance from small businesses (73 percent) and lówør4ncome
important to ensuc comp,lianc:e
s~all bu~'nesses (73_~~t)
laW13f''':il19OlP8
taxpayeR» (66 pGrcent), as Well _
percent)~
well.
.,
taxpayers

•

An increasing'number of taxpayers cIte third-party repoiting a a deterrent to _
taXpayers elte
repqrth1g as deterreJ.'1t
increasing
percent)
noncompliance (41 percent)..

• Over 82 ~rcent of Americns say that their own personel integrity has thegrsatest
percent af Amerieaps ~
their
.e,ersonallmegritytlas tfi~.areate8t
influence whether
and
lnfluence on wtiether they report anq: pay their taxes honestly. This 'is.double the number
ttlelr
honestly.. this is
the'
citing any 6tber-~do[.
other factor.

on

According to the Pew Research Center study “A Barometer of Modem Morals,- 79 percent of
Aa:erding
aA
M9;~ein Morals,”
P2rcent Of
Americans consider not reporting all income on ones tax return ta be morally wrong, while just
~ei'ieans ~Rsider'
one!s'~)( retum to
wrong.~ite JJ.lst
issue. Of4lh~e
it is,tlo1
5 percent consider it morally acceptable and 14 percent say if is not a moral iss~ Of those
~ per,cerrt censider Olol'8lly
second onlyitf).
who 'said this behavior Is morally wrong, cheating on one’s taxes ranked seoond only to
is rT}PrallY.
wh~ sald
d'!eating
one s.~es
on,ohers spouse.
·
,:."
cheating on one’s sPQuse.

40
D056
Exh.2

initiatives
Initiatives
Increase audit coverage and better target returns for examination.
Increase
better
rorexamination.

•
•

Enhance the ability to identify and address tax schemes of business and individuals
the
identify
address tax
of
'. involving offshore activity, address illegitimate use of tax havens to shelter income, and
Involving
income,
activity
increase Information matching and examination activity for individuals living abroad.
Increase information
Individuals Irving abroad.

•

Enhance collection programs and increase the Federal Payment Levy Program using thirdEnhJ:lnce collect/on
Increase
Leyy
party data.

•

Work with other federal agencies regarding the Federal Payment Levy Program. (Also
Program. (Alsea
agen,Gies
supports Component 7)
supports Componenf7)

•

Improve compliance by tax preparers through implementation of the Service Wide
tax
Implementation
Enforcement Preparers Strategy. (Also supports Components 3 and 7)

•

Improve collection selection criteria and filters for balance due and nonfiler cases, including
nontller
identifying
Identifying and addressing potential high-income nonfilers. (Also supports Component 3)
high-lncome

•

Litigate cases, work settlements, and design large scale resolution initiatives for tax shelter
transactions to deter noncompliance. (Also supports Component 1)
nencompllance.

•

identify taxInitiate a project using Combined Annual Wage Reporting (CAWR) data to Identify:taxexempt organizations that may not be properly reporting and paying employment taxes.
(Also supports Component 3)

, •
.

I·

tax,
Increase criminal enforcement on abusive schemes, corporate fraud, employment tax.
abusjve schemes.
egregious nonfilers, and on Bank Secrecy Act violations.
norm'ers.
of servie&-wlde resource~ identify, develop,
Improve the alignment and allocation of service-wide resources to identify, develop. and
arena.
resolve challenges better in the global taxation arena.

r

•

t •
•

!
., '

I

Improve
Impreve tax administration to deal more effectively with increased emphasis on
globalization
glebaljzation by all corporate and individual taxpayers.
corporate
taxpayers.

•

Increase industry
issue
Increase-Industry and global Issue focus by aligning resources to cases and issues with the
al/gnlng
highest compliance risk.

•

of
Leverage the efforts at examiners as well as external partnerships with foreign tax
emerging issues
identify
administrators to fdentlfy and address ~merglng Issues of significant compliance risk. (Also
co",plia1'1~
supports
7)
sUpports Component 7)

•

Address offshore and cross-border compliance risks through enforcement and by issuing
guidance
guidanGe in the following areas:
o
o
'0
o

o
o
o

Cost sharing;
Abusive foreign tax credit generators;
strategies;
Section 936 exit $a~egies;
earnings
Foreign eamings repatriation;
Hybrid instruments; and
Transfer pricing.

--_

..., .... _,- - -

..

,~

'. - i

41
D057
Exh.2

Enhance Taxpayer Service
Effective taxpayer service has a significant effect on voluntary compliance.

unintantlonat erro;rs.
Tmcpayer
helping'taxpayers
Taxpayer service is especially important for helping taxpayers avoid making unintentional rrers
espeIaIly
The fRS provides year-rou,nd assistance to milHons of tax~ye~ through many sources•.inckding
IRS
year-round assitance tQ miflioAs ot taxpayers
sources, inclAding
outreach
programs,
puI)JicatiOAS, feS0lations
publi~hed'
. outreaoh and education programs. tax forms and publications regulations and other published
! .gul!;!ance, 10n-f ee call,c:en,ers t the Internet, and Taxpayer Assistance Centers (TAGs). In addlflen
guidance, toll-free call centers,
,
IntQme~. end T;,vcpayer
Center.s{TACs).
addition,
dwing the filing season, IR$-supported VoIuiteer Inoome Tax Assistance (VITA) and T.
during
fillng~eason, IRS-supported Volunteer Income
Assistance
anc! Tax
Counseling for the Elderly (TOE) sites provide free return preparation services forlow-income
(TCE)
provfde
~rvices for low-inPQme.
elderly, and limited-Egllsh-prcf1ciency ~xpayers.
elderly
limited-English-proficiency taxpayers.
AsSisting
withtax
b$fore
Assisting taxpayers with their tØx questions before they file their returns reduces burdensome- post
returrs redUG88 b4rdensome p,pstfillog noti~
otl1er oo~pQn<:Ienoe
tlie
arid re4uces overall inadverlent
.
filing notices and other correspondence from the IRS and reduGQ& 9verall inadVertent
ooriqmplianoe and the need fçrdownstream enforcement
m;neom'pllanoe
for down$'eJIm enfo~ment.
~

Acorcflng to asuey commisipoed by the iRS Qversiaht ·Board in 20 ; taxpayers lincreasingly
According a survey commfssiened
IRS' Overs glit Boara n 200G, t'aXMyelS noteasingly
0&
ceeegnJze that the
proVides g000 qualHy serviCe
a variety hannels
rcognize thaLthe IRS provtdesgoodquaity service through avariety of channels, such as it&
salts
lines
wabsit&, tOil-free
TACs. This-is supported by
metrics
Ø1te, toll-free telephone lfnes. and TAG,. This is supportedby the JnelrlC$" used to measure the
effectiveness of the IRS' taxpayer aervice efforts. In category after category, there is improvement in
IRS’ taxp$yer service
t;ttfectlveness
category"after
ther:e is
Jev&ls.aftelephone services. eleCtronic filIng.
lRSgøv.
the lveIs of telephone Cervices, electronic filing. and access to ·IRS.gov. This is demonstrated by
the following statistics:
•

E-filing inQM.duals
E-fllif1g by indh4duals has continued to increase, up ttJr.ee percentage points in TY 200$, from 51
increase. three
pointS TV 2005,
to' $4 percent aU individual returns.
'
percent t>o 5:4 pe~nt of all indMdual ret~ms .

•

The level of .serviee for"foll-free assistance was 82 percent, about the same level as in ~005 and
servicefortll4ree a$istanc~ wa&82 ~(Cent, abO.u l
.evel in 200$
up substantially from ·2001, (Level of seivice Is a measure that reffects the percentage of calls .
2601 . (level of·servlce fs maasure thatrefleçts
percen~ Of
answered through lhe."IRS' 'toll-free taxpayer assistance program compared to totat clla*empts,•
the IRS’ toIl-free ~~yet
ansWered
total call attempts
including
answered. J)usY. disconnected.
abiindorYed.)
.inc:ll:J,dlng calls answered, busy, disconnected, and abandoned.)

•

TI18
remEiins 94
same ~ 2G0.
satisfoction With tl1e.toll·free
The level of customer satisfaction with the toll-free line remainsj4 percent, the sønle as . in 2005.

• The tax law accuracy of toll-free response edged up to 91 percent .from 59 percen!;in 2005..
of4ollfree ~nse ectged tQ P,ernent from 89 percent in 200~
fax!.law

.

• iTaxpayers continued 1'0 find lRSgov a useful source of informtto for complyihg with theirtax
~payers contihued to
IRS.gov
Ihformatlon
GOmpfylng With their (ax_
oiø$ons. Visits to the IR$ ,Øbsite jumped nearly 10 percent in 2006 to more tl'!an 107 milliOn •
o mgations.
IRS website jump8d
petcE;lnt In
mere thab 197 mlllion
~
.
visits.
• More t.axpa~ used the orIine refLindstatus tool WhareMy Refund” In 200&. there were
2006,
• Mor~ taxpayers usec:l
online refund status
"VVh~re's My Reftmd.iI
247 million stati.s Ohecks, w nearly 42 percent from 2005.
24.7 mil Ion stBt4s eheClcs. up
~2
frop12005.
~ expanded outreach aCtiVJties to indtyiduels currently underway ifriolude:
Expanaetf
nclude:
activities lnd{vidl1als

•

.

Aluii4wy Initiative. During FY 2008 the IRS will analyze and 4etermine the .resuftS of prioryear
IS
Military
analyZe
de,termine tt:\e result prior year
ou~h
8OOn-to-be
militallY
mJrrtafY. perisions.
targeted outreach to retired and ,soo-to-be retired military on the taxability of military pensions.

42
D058
Exh.2

Using a control group approach, the comparison of post-outreach dejinquency ratøswith pre
~pPJOach.
CQml?ari$On post':'(!)utreacb deliJ'lqlJency rates'with preoqtreach rates will<assist the IRS iii determining the effectiveness and impactofits efbrts. Once
outre~ch
will a~lst
In
impact of its efforts.
future
resulls' are anal’zed strategic direction WiIIbe determined for futur& years forihe entire federal
analYzed,' stratQgiG ~ireCtlOn will b6
ror the-entire
results
employee-aridretiree population.
. '
employee and retiree popufatiQA.
a Disability Initistlve. The IRS is pathiering with national ahd 10081 organizations that serve
and local
• DIsabilitY inhti3tive.
IR~ Is partnerihg wJth
txpayars with disabilities in an effort to provide eØucation on available -tIDe credits 'and tax
ta)(payers
dlsabintles
~ffort
pro~ide'-education
avaUabJe t5x
and
prepBratjon assistance. rnffially
partiolpated
It
preparation assistance, Initially 30 cities participated and 'In 2007 ft has beeriexpanded to 54
in
been expanded
cities.
.
‘citiss

•

Llinhed
ProR~iency HIspanic InlJia.tiVe. Th~ [RS is'
Limited English ProflcisncyHipanichilliative. The IRS is supporting an aggresslve multimedia
aggressive
and grassroots outreach campaign targeting communities with a significant number of Hispanic
individuals to disseminate tax information and dlstrillute Spanish prbducts.
Informatfon
product
distribute

•

Native Anrerfcsh Init/sOre.
,Native Ametican lnitiat/ve Partnering with national and local volunteer organizations to reach
organiza ans
initiative Is dS!leJop
hara-to serve,are.as, su~flas
hard-to serve areas, such as Indian Reservations, the focus of this ini,titive is to develop new
and enhance’ existing relationships to Increase distribution of educational product and
eflhance
educatianal prodllcts
increase
information,
infOrmation, expand tax preparation assistance and I:>royide -access-tO a broader array of
provide access to DrQ8der
resources for Implementing strategies that include the Eamed Income,ax Credit (EITO).
for·implementing
fnelude
(EITe).
Earned Income Tax

•

Ama! in,Wative. Building alliances with groups that have ederlsive pre-existfng urat
RUf8llnitlBl/II~.
alllances:With
~ensJve- p~xistlng , ural
r
infrastructures and knowledge to teach rural populations, th ,IRS will partner with thø W,K.
populations. the IRS
wtttl the W.K.
Infras'trUctures ~hd knOwledge o reach
Kellogg Foundation to bring the Rural Strategy to a national scale In FY 20OIthe Kellog!;l
naftonal scare.
2007, the lcellogg
Foundation agreed
Foondationagreed to fund rural initiatives in seVen states, The IRS will also partner with 'the
rurallnltiatJves In seven states.
(RS WIll
the
U.S. Qepartmentof Health and Hmn SeMces WelfarePear Techn~' Assistance to develop
Human Services Welfare Peer Technical
u.S. Department of Heahh
state-wide
stat&-wide rural strategies inwo states,
strafegies In tWo'States.

,

-

In July 2005, the Senate E::ornmlttee on Appropriations isued report fanguage requesting that the
ComnIttee Qn,
JIJ~y
issa$d repart language req~tlng th~t
IRS conduct a comprehensive review of its currem portfolio of services and develop a flve-yeer plan
current portfol1o ohen/jces
lRS
cOmprehensIVe
develOp a<fjve--year
for taxpayer services. This ·review, conducted jointly with the Natl'onal Taxpayer Advocate and 1he
reviews
taxpayer
the-- National
A~vocate
the
1S Over$;gbt Board, Was designed to achieve the followinQ objectives:
IRS Oversight
was
following ebjectlves,
•
•

Establish credible taxpayerl’partner’baseline l"Ieed~.
Estal>Jish a.credible 1axpayer/~rtne[i basefine of needs, preferences, 'and behaviors;
behaviors

•

Implement a transparent process for making sarvice-related resource and operational decisione
tran~parent proce$$ to
seNi~rel~ted reSQurce an~ oP-8~UQna' decisions;

•

Develop a framework for institutionalizing key research, operational, and asspssment øtiv)ties te’
frameWOrk institutionaUzfns
resear;ch.
nd assessment activities to
plan and manage improved service delivery; and

•

I

Utilize bothsheJt-ter:m performance and long-term business outcome goals and metrics to
\Jtll~e both short-term ~rfQrmance
long-t~rm
goal~
(fIetrioa. toservice
assess ser:v,98 value.
!

In April 200B the Taxpayer Assistance SlueplntTAB) Phafijil 1 report was conp1eted and the
2006, fhe
Assistanc:e Blueprint (TAB) Phase I
completed
~u~
to Con,gress.
1 id~ntified
r8QOrted
strategic S$rvice imprQ,vement
røsults presented ‘to Congress. Phase I Identified and reported five trébgic seMce inprovemenf
themes for enhancing taxpayerand practitioner service needs and preferences:
talC- ayer and
p
servi~
p'reterences:

43
D059
Exh.2

II Pt

O.

Iii II! ‘11! 411
a’

0o0
D

03

SLCO

~~~.

(1

Improve and expand education and awareness activities. This theme addresses tbecritical
need for makir,g taxpayers and practitioners aware of the most effective and efficient IRS
seNic~ options and de1ivery channels for meeting theirtax obligations and receiving benefits

0)
—
CDCD
T
Z
(DV
—.O’

•

'
VeVa

-

Develop short~e"!, performance and lang-term {luteome goals and metrios. This theme
provides for the development of 8 comprehensive.set of perfonnance goals- and metrics to
evaluate how effectively the IRS is meeting taxpayer expectations. and how efficiently It Isdelivering services.

‘

‘.

a

#*

S
0
r
o._o

CD3

0
ö4

go

D

‘<ø
m’
—
03
CD

..

zø.

1
d ‘d

p

ZD

C)

DCDcD

Th<1

DØ
30)0.

.0)Ø

-

0)0
CD.

C)2)
O<

0
C1)

.g

.-

c->O
CD30

c3CD

0
1C

p

-

,<
CDV
OQ

g
1

c_

0
1
cD<
,
g.

.

CD—

r

-“cD

CD
0
V

0)DD
0
ZW

.JQ

CD

0>

—

V
0—..

CD Z

x—3
0)
XV

CD V
(D<m
=<
<1%

c

Zq

•

4L

Improve and expand t~inin9 and support tools 10 enhance assisted services. this theme
tJlghligtJts- the need for ensuring accurat& Information across aU channels by tmprovilJg and
expanding training, technology infrastructura. and support for employees, partners. and
faxpayeFS.

0
CD

C) V m
O-—
:zOQ
CO.<

•

V3

El6vate self-service options to meet the expectations of taxpayers. This theme focuses on
proViding clear standard and easily customized automated content to deliver aecunde.
consistent. and understandable self-assistance seNlee options~

—
CD3

V
Q
-‘
O4.

•

.

G

OptimiZe the use of partner services. This theme emphasiZes. tlle critical role of 1hlrd parties
In the delIVery of taxpayer services, and calls fOr improving the level of support and direction
provided to partners to ensure consistent and accuni\te ac:tmlnisfrafion of the tax law.

•

TAS Phase 2 focused on developing reffned data around taxpayer ~nd partner needs,
: preferences, and behaviors. Phase 2 also Identified current planning documents.. deolsioh
: processes. and existing commitments affecting IRS service strategy'. The TAB Phase 2 Report,
! deliverecl19 Congress In April 2007, includes analysis of research results as well as details pta
• five-year sll'ategJc planior taxpayer: service. The TAS Strategic Plan outlines a multi-year
i commitment to research, includlng conducUng research on the Impact of taxpayer 8elVice on
. compliance. This will help the IRS better target taxpayer servlces and ~vel9P programs that
can improVe voluntary compliance and contribute to reducing the tax gaQ. The TAS Strategic
Plan includes performance measures, $aMes lmprovement initiatives. and a decision:-makfng
and gO'lemance process to prioritiZe service and I'$search Initiatives arr~ funding proposa1$.
Continued st$keholder, partner, and employee engagement Is incorpQnrted Into all aspeCts of
the T AS Strategic Plan.

::rCD
-1O)3
CD ;
CD

0
0
0

mu

C)
C

a

CO
CD

C

C)

Tne IRS does not know what percent of the tax gap Is due to Inadvertent, unintentional ~
compliance that arises from the complexity and confusIOn surrounding our tax raws having very
little research currently available that addresses this issue. Several research studies are
currenUy underway as part of the TAB Phase 2 to measure the Impact of service on redUCing
i~adverte .errors. ActdltiOnal studies will be Incl~ded In the proposed five-year research plan.
Current research Inctudes:
CD

!!-

—
-- •

xo

4
co
(l)- 2z
.+CD w

-

_5w

4<

S.’

1db

CD

c2. z

1?

—

‘Ø

0

C•)

.- - -

. o

-‘

CD 0)
Xb
cD
•3 -c
(D
0
=0) V’<

BenChmark Survey of TSxpsyers. This survey will ask 40,000 taxpayers tf they have US$d IRS
to help prepare and flleotheirtax retums - ana which services and channels
(e,9f' phone~ walk-I"" Internet, Rublieations) they used to get this help. The IRS will test to see;f
there are differences in average values for measures of filing. reporting, and payment
compliance for respondents who did or did nQt use various fRS taxpayer ~rviceS.
~payerservices

44
D060
Exh.2

•

survey questions
working
NRP Study.
(VRP StUdy. The IRS is workiR9 to add surv~y qu~stJons to the next set of NRP audits to (1)
attdits (‘I)
programs had
taxpayers
fl~ out whether tax-payers- who used customer service p (ograms had fewer reporting errors
repqrttng
find
and
root causes
data
try
returns
on their retulT1S and (2) by to collect useful (ja~ on the roof,98~ of inadvertent errors -and
possibility incorporating these types
The IRS is exploring the possibilitY of ineorporating th~~e tyl*JS of
possible treatments.
p~lbfe- Ue_t/1lenfs.
a
thEt
a pilot basis.
questions into
q~eslioAS ihto field examination audits on a pllolbasjs.

•

Se/f-Prepared Returns. This analysis
The ComplIance Impat1l dfPreparer, IRS and Self-Prepared Retums. This-analysis will
Compliance Impact of Preparer,
return: self-prepared,
prepared
into groups based on who pteparea the retum: · self~prepared .
returns
divide all retums processed into_
divide
other options. The IRS Will
practitioner prepared, IRS prepareQ. SOttwaf~ p~pared and ofl1ar options. Tt'le IRS will test
prepared, software prepared
prepared,
pra¢itloner
are
compliance among these
measures filing, reporting.
to see if mea~ures of filing, reporting, and payment oompllance'arriong tfiese groups are
significantly
significantly different.

•

Compliance.
(TA SI Programs
The Impact
TlJe.lmpact of Taxpayer Advocate Service (TA$) Progmms on Compl/aflat!. This analysis

in

TAS
will use
File transaction
to determine which taxpayers
Will u~ Master FII& transa~Qn codes -to determifle ;whIch ~EWers used TAs services in a
filing,
group will
year.
as a test group.
particular fiscal year. This grottP wlll serve as a-.test group, and their subsequent filing.
comprised of a
tracked.
payment. and reporting compliance
payment, arnd reporting'oompllance will be tracked. A control group com~rised 0f a·random
who
TAS services
sample of taxpayers Who did not use ,TAS serv:ice.s or IRS services during the same fiscal
whether there
significant differences compliance
year will be tracked to determine whether'there are sigJliflcantJJ~~noes in oomplianee
Will
two groups.
between
rates betWeen the Mo groups.

"

wi"

•

returns
will measure the accuracy
Behavior Testing
BehaviOr T8$'tIng Lab. This initiative Will measuAJ ttae accu.racy of sample tax re.rums
and without
prepared by several focus groups of taxpayers. with an willl6Lit access to IRS taxpayer
ta~payers.
compliance.
services.
impact of service
is another
for measuring
f!8Niees, This i~ ~ther methodology fer fAea~url~ the Impact ef sefVl~ on complianCe.

revealed
Analysis the
taxpayer data compiled.
, Ar:1a~ls of Ule wealth of 1a~yer :d~ta compiled as part of TAB Phase 2 revealesJ certain
findings, combined
recurring findings abopt taxpayer neeas, preferences, and behavior. The f1ndi~j~ . combin&4
needs,
about
recurring
ongoing
priorities,
with ongoi~ policy GO"siderations and prioritJes~ led to th&developrnent of TAB.GUiding
considerations
the development TAB Guiding
. ith
w
that
for the development of
Strategic Plan
Principles -that provide the groundwork fQr !he "developmentaf the TAB Stra~ic. Rlan for
taxpayer service. The
Guiding Principles
.taxpayef servi~. Th~ TAB Glllding Princip Qs are:
The primary
indivduaI
service
is f aqlitate
1. The primary goal of service for indiv~du~f taxpayers Is to ·facilitate compliance with federal tax obligations.
obligationS'..
portion of the
errors
individual taxpayers. IRS
gap is
2. A porfJon of.the tax ~apJs attributable to ·errors by Individual taxpayerS. IBS service
correct
due
be designed prevent, minimize,
programs should ba"deslgnoo to prevent. mlnimiz~ and Glorrect such errors with atIe
of taxpayer
consideration of1axp~yer burden.
minimizing,
focus
3. IRS service investments will foous on preventing, mir:1imizlng. and correcting taxpayer
noncompliance.
noncompll~nce.
for obtaining
4. Enhance the IRS website so that it becomes the fim choice of more taxpayers -for; obtaining.
first cholte
Ehhan~e
the information and services needed to comply with tax obligations.
.

•

~. f

5.
recognizes the
·5. The IRS repognize.s ~e significant role that partners play in tax administration. As such, the
rofe
tax·adminls~on. As' such.
parties in helptng taxpayers understand
look for QPportunitles to-a sjst thes~
IRS will lOCk. tor opportunities to assist these third p" rties 1n heJl)ibg taxpay:ers \.fnqerstand
e
and
af)d meet their tax obligations.
obUgatioRS.

45
D061
Exh.2