The IRS research bulletin

156 Pages·1991·4.9 MB·English

by  United States. Internal Revenue Service

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Research
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Department ofTreasury
Internal Revenue Service
Publication 1500 (9/91)
Catalog Number 11546J

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2 3^5 TheIRS
Research
Bulletin
Publication 1500 1991
previousCy titCcd:TrendAnalystsand!R$tatedStatistics
Robert F. Hilgen
Assistant Commissioner
(Planning andResearch)
David A. Mader
DeputyAssistant Commissioner
(Planning andResearch)
Roger L. Plate
Director, ResearchDivision
Gary P. Bingham
AssistantDirector, Research Division
Ted H. Rogers
Chief, Technology Branch
LIBRARY
James D. Swartzwelder
5030 Chief, Projections andForecasting
Group
Bryan L. Musselman
rmmH DEW$INT Editor
Ken R. Beier
Assistant Editor
Suggested Citation: Carol E. Sattler
United States Department ofTreasury AssistantEditor
Internal Revenue Service
The IRS Research Bulletin Carolyn D. De Wilde
Publication 1500 (9/91) Production/Design Coordinator
Washington D.C.: GPO, 1991

FOREWORD
This is the first edition ofthis publication to be titled The IRS Research
Bulletin (prior editions were called TrendAnalyses andRelatedStatistics). The
new title more accurately reflects the expanded role of this publication. In addition to
highlighting trends that could impact tax administration, this document now serves as
a major vehicle for communicating recent tax administration research to IRS execu-
tives and to the general public.
The articles in the 1991 edition ofThe IRS Research Bulletin reflect some of
the fundamental changes that are occurring—in tax administration during the 1990s. In
addition to "Tax Systems Modernization" the Service's—comprehensive effort to
modernize its computer and telecommunications systems the Commissioner has
emphasized four other overriding forces ofchange at the IRS: a commitment to
providing quality service to taxpayers; adherence to the highest standards ofprofes-
sional and ethical conduct; addressing the diversity in our workforce; and enhancing
voluntary compliance with the tax laws, while minimizing taxpayer burden and the
cost to the government.
Four articles in the publication address the subject ofproviding quality service
to taxpayers. Three articles present statistics on the quality of service IRS is provid-
A
ing in the areas ofExamination, Collection, and the Problem Resolution Program.
fourth article reports on the accuracy of IRS projections ofthe number oftax returns
to be filed.
An additional five articles discuss aspects ofenhancing voluntary compliance
with tax laws, including analysis of specific "market segments" oftaxpayers. These
articles cover compliance with new laws on the child care credit and the reporting of
child care income; the reasons for invalid TINs on information returns; employer
compliance in reporting employment taxes, by type ofindustry; tax amnesty pro-
grams in different states; and the demographic characteristics oftaxpayers who file
their returns electronically. A final article addresses the issue of managing human
resources in times ofrapid technological change.
In conjunction with the fundamental changes taking place within IRS, one
—
particular goal of this publication remains paramount to generate quality informa-
tion on significant trends, research and operational developments in tax administra-
tion, and to convey this information to those who otherwise would not have ready
access to it.
—
(a_<~^\-
(
Robert F. Hifgen
Assistant Commissioner
(Planning and Research)
TABLE OF CONTENTS
Section
I
Trends '91
Demographic and Health Trends 3
Economic and Industrial Trends 6
International Economic Trends 12
Technology Trends 15
WorkforceTrends 18
Section
II
Research Articles
—
Electronic Filing Who's Participating and Who Isn't 27
Bryan L. Musselman
Taxpayers whofiledelectronicallyin 1991 tendedto beyounger, earn less
than $30,000a year, live in the South, andfileForm 1040A.
Whatever Happened to Child Care in 1989? 33
John A. Szilagyi
Reporting the name andSSNofchildcareprovidersappears to have increased
compliance with the childcare credit and in the reporting ofchildcare income.
How Are We Doing? An Analysis of Projection Accuracy 38
Russell R. Geiman, Bonnie L. Nichols and Carolyn D. De Wilde
Totalreturnprojection error rates have been in the one to twopercent range
with no apparent bias towardeitheroverprojection orunderprojection.
Survey of Payers and Payees with IRS-Identified Invalid TINs 47
Shien S. Perng andJohn Caggiano
Payersofinterest anddividendsaccountfor54percent ofthe mismatches
between namesandTINson information returns and those onIRS masterfiles.
Predicting Employment Tax Compliance: Further Analysis
ofthe SVC-1 Employer Survey 52
Ken R. Beier
The levelofunderreporting ofwagesis higherfor large employersandfirmsin
thefinance, insurance andrealestate industry.
Impact ofCollection Enforcement Action on Individual
Taxpayer Behavior 56
Joel Friedman
Enforcementaction securesor resolvesdelinquentreturnsandcollectstaxes,
butappears to have little effectonsubsequentfiling orpaymentbehavior.
Tax Amnesty: Improving Compliance? 61
Timmie S. McArthur andEdward F. Emblom
Taxamnestymaybea goodwayto introduce an enhancedenforcementprogram,
but state levelexperience indicates that long-term revenue gainsare small.
1989 Examination Customer Satisfaction Survey 66
James A. Wilhelm and Debbie Dorohow
Taxpayersbelieve they were treatedfairlybyexaminersandrate the service received
during an auditas highlysatisfactory.
Opinion Survey ofTaxpayers Contacted By IRS Collection 70
Shien S. Pemgand Carolyn Quinn
Taxpayersfavorably rate the service theyreceivedfrom Collectionandstate that their
experience wasbetter than expected.
Trends in the Problem Resolution Program 77
Alan Kravetz
The ProblemResolutionProgram has haddemonstrable successin resolving
taxpayerproblemsandinpreventingfutureproblemsfor taxpayers.
Applying Sociotechnical Work System Design Principles in the IRS 82
B. P. Robert Stephen Silverman
The use ofworksystem designprinciplescan contribute to the qualityofservicesand
the qualityofwork lifeforemployees.
Section
III
Research Abstracts
Office of the Assistant Commissioner (Collection) 91
Growth ofTotal and ACS TDA Inventory HelenChoi 91
Anticipated Future Expirations of Accounts in Currently
Not Collectible Status Jeffrey T. Colson 91
BMF
Collection Research File (CRF) Trend Report: Currently
Not Collectible Modules (Extract Cycle 8939) Jeffrey T. Colson 92
Comparison of Accelerated TDAs to Regular Processing Jeffrey T. Colson 92
Comparison of Delinquent Accounts with Prior and No Prior
Delinquent Return Activity Jeffrey T. Colson 93
Origin of Modules That are Reported Currently Not Collectible-Unable
to Locate Jeffrey T. Colson 93
The Impact ofTime to Secure a Return on Collectibility Jeffrey T. Colson 94
Analysis ofIMF Installment Agreements Given In CY 1988
Using the Collection Research File JoelFriedman 94
Large Dollar Field TDAs (Over $500,00) JoelFriedman 95
Subsequent Return Activity on IMF and BMF Delinquent Returns That
Posted Status 02 From CY 1986 to CY 1988 JoelFriedman 95
RWMS
Verification of Scores JoelFriedman 96
Office of the Assistant Commissioner (Examination) 97
Internal Revenue Service Business Information Returns Study JohnDevlin 97
Office of the Assistant Commissioner (Planning and Research) 99
Compliance Levels for S Corporation and Partnership Returns
BarryP. Arlinghaus 99
—
Tip Income Study A Study ofTipping Practices in the
Food Service Industry for 1984 RickFraianduono 100
Payer Master File Delinquency Check Using DIF JohnHiniker 101
Automated Taxpayer Service System Confirmation Study GeraldJones 102
Effects of Nontax Refund Offsets on Taxpayer Compliance:
—
Tax Year 1986 Refund Offsets Addendum TimmieMcArthur 103
1989 Customer Satisfaction Surveys for Service Center Adjustment and
Underreporter Operations Malqueen Middleton 104
Service Center Overtime Study MalqueenMiddleton 105
Form 1040 Shift Study, Tax Year 1989 HilaryRogers 106
Development of Return Selection Formulas for Form 990T James Wilhelm 107
IRS 1990 Research Conference Report:
How Do We Affect Taxpayer Behavior?
The Case for Positive Incentives, Assistance or Enforcement Joseph Weikel 107
Section IV
Statistical Tables
Statistical Tables 113
Stuart Simpson andRobinRappaport
Employment, Income, and Population: Tables E1-E9 1 15
Table Notes 1 125
Tax Return Filings: Tables R1-R9 127
Federal Tax Deposits and Withholding and Information Documents:
Table RIO 136
Table Notes II 137
Additional Publications 141