THE IMPACT OF THEIRS ON VOLUNTARY TAX COMPLIANCE: PRELIMINARY EMPIRICAL RESULTS

This paper provides an overview of 2 IRS studies of the indirect effects of a broader range of IRS activities. The first was an econometric analysis of individual income tax filing and reporting behavior, and is referred to in this paper as the "Indirect Effects Study." The second was a qualitative attempt to achieve some consensus among IRS executives as to the relative magnitudes of the indirect effects of an even broader range of taxes and IRS programs. This is referred to as the "Consensus Judgments study." After discussing these 2 studies in detail, the paper outlines how the results will help IRS make resource allocation decisions, and concludes by identifying opportunities for future research in this area. The Consensus judgments results, though derived completely independently from the Indirect Effects study, are consistent with the latter in several important ways. Research into the magnitude of the indirect effect of IRS actions on, and other determinants of, the voluntary compliance of taxpayers is still in its infancy.