Research Studies

For the National Taxpayer Advocate, thorough research and analysis of current tax issues and trends is a vital part of the Annual Report. Taxpayer Advocate Service research projects yield accurate, insightful data that inform her as she advocates for taxpayers, and strengthen her authority and arguments before the IRS and Congress.

This report focuses on how taxpayers’ service preferences, usage patterns, and usage effectiveness vary by demographic group within the taxpayer population. Our principal objective is to quantify and characterize the demographics of taxpayer groups that appear to have an on-going need for the IRS personal services provided by phone and in person at the Taxpayer Assistance Centers.

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The objective of the study is to ascertain if educating individuals whose EITC claims may be erroneous, influenced their future EITC claims and ultimately increased compliance without audits. TAS mailed letters to taxpayers who appeared to erroneously claim EITC benefits, but who were not audited. These letters explained the requirements for claiming the credit and identified the error that taxpayers appear to have made on earlier returns.

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Individual taxpayers who are unable to pay their tax debt immediately can make monthly payments through an Installment Agreement (IA) with the IRS. These agreements allow taxpayers to pay off their tax debt over time. The IRS uses Allowable Living Expenses (ALEs), expenses deemed necessary to provide for a taxpayer’s, and his or her family’s health and welfare and/or ability to produce income, to calculate a taxpayer’s ability to make IA payments; however many IAs do not require this financial analysis. This study investigates default rates and subsequent compliance for taxpayers who had an IA opened in calendar year (CY) 2014. It also compares subsequent filing and payment compliance behaviors of TAS customers and non-TAS taxpayers who had an IA opened in CY 2010, to see how the financial analysis provided by TAS affects subsequent compliance.

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Many taxpayers satisfy their taxpayer delinquent accounts, even though their incomes do not exceed their allowable living expenses. These liabilities are often satisfied through the offset of other refunds due to the taxpayer, or through the abatement of the liability. Nevertheless, actively working these cases may be resource intensive for the IRS and burdensome for taxpayers. Therefore, TAS explored the possibility of using the IRS’s internal data to systemically classify taxpayers with incomes not in excess of their allowable living expense as currently not collectible hardship.

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In 2015, the Taxpayer Advocate Service published a study of the Individual Master File Collectibility Curve, which focused on how dollars collected decrease as the years progress after the IRS assigns the case to Taxpayer Delinquent Account status. To further explore the issue of collectibility, TAS Research conducted a study of IRS Business Master File collections. The study focuses on the collection of business debts from both the IRS and taxpayer perspectives.

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