SOI, it's beginning to 1992

     If it seems like you have been paying income taxes forever,
you probably have. Last year, the Nations income tax law turned 80
years old and this year we will be releasing the first income and
tax statistics from the tax returns for 1992, the 80th year.

     In recognition of this august occasion, this issue of the
Bulletin will have a historical tint to it.  Each of the Bulletins
over the next year or so will feature special articles in each of
the major subject areas, augmented by historical tables and
information about changes in the tax laws since their inception. 
To kick things off, this issue begins with a special article
entitled Turning Administrative Systems into Information Systems,
by Fritz Scheuren and Tom Petska.  It summarizes the current status
of Statistics of Income (SOI) and provides a vision of our plans
for the future.  Later Bulletins will deal specifically with
international tax returns, individual income tax returns,
corporation income tax returns, tax-exempt organizations, estate
tax returns and personal wealth, partnerships and sole
proprietorships. Other special articles may also be included from
time to time. 

     But first, some background: it all began on February 25, 1913,
when the Sixteenth Amendment to the Constitution was ratified,
authorizing Congress to lay and collect taxes on incomes, from
whatever source derived, without apportionment among the several
states, and without regard to any census or enumeration.  Three
years later, Congress passed the Revenue Act of 1916, which
included a provision requiring the annual preparation of statistics
of income with respect to the operation of the tax law.  This
provision, with practically no change, has been repeated in each
major re-write of the tax law since then, most recently in the
Internal Revenue Code of 1986. 

     The first SOI report, based on income tax returns filed by
individuals and corporations for Tax Year 1916, was released in
1918.  However, this first report also contained what data there
were from the income tax returns for 1913-1915.  (In case you
wondered, fewer than 500,000 individual income tax returns were
filed for 1916, although by 1917 there were more than 3.5 million.
Currently, the number is about 115 million.)  Then, as now, the
data were used primarily for tax research and revenue estimation,
especially by the Office of the Secretary of the Treasury.  The
Internal Revenue Service itself (then, the Bureau of Internal
Revenue) was also a major user, since the earlier reports contained
a great deal of data by State that were used to help administer the
tax laws. It wasnt until the 1930s that the Commerce Department
recognized the vast potential for using tax return data as a
source for information that could be used in the newly-created
system of national accounts.  To this day, Commerce continues to be
one of the primary customers.  Of course, both technology and
methodology have also changed dramatically since the first SOI
reports were released.  

     SOI processing began as a vastly manual an labor-intensive
operation. Our first computer was a then, brand new Remington Rand
UNIVAC, which we helped the Bureau of the Census purchase in the
mid-1950s, in return for processing time (on the night shift).  We
have since moved away from punchcard-based technology into a modern
interactive computer environment, with on-line processing of tax
returns. Needless to say, corresponding advances in statistical
methods have also been incorporated along the way, to improve the
quality and timeliness of the data we produce.  Similarly, the
types of annual data available have also grown substantially.
  
     Initially, the SOI reports focused almost entirely on
individual and corporation income tax returns. Since then, user
needs and new provisions in the tax laws have led to the production
of data on about 60 different topics, including data needed for
special Treasury reports required by Congress on high-income
individuals, capital gains, international boycott participation,
corporate income from U.S. possessions, income of citizens working
abroad, the foreign tax credit and the operations of Foreign Sales
Corporations.  These remarks just touch on a few of the highlights
from these past 80 years.  As mentioned above, over the next year
or so the Bulletin feature articles will focus on historical
changes in specific areas.  In addition, readers interested in this
perspective may wish to look up the following: 

the 75th Anniversary issue of the Bulletin (volume 8, number 2); 
 
Individual Income Tax Shares and Average Tax Rates, Tax Years
1951-1850,  by Fritz Scheuren and Janet McCubbin
(Bulletin, Volume 8, Number 3).  

Individual Income Tax Shares and Average Tax Rates, Tax Years
1951-1986,  by Janet McCubbin and Fritz Scheuren
(Bulletin, Volume 8, Number 4). 

We hope we have interested you enough to also want to review the
supplement to this issue of the Bulletin Board, which recounts the
history of SOI. The SOI Publications Team wishes to thank Marty
Bloom, Keith Gilmour and Howie Wilson, all retired former SOI
employees (Howie Wilson is a former assistant director); and Dave
Paris, Chief, Individual Income Tax Statistics Branch, for their
contributions to this chronology.  Selected historical data also
appear in the back of each Bulletin. Other collections of SOI data
covering several years include those found in the various SOI
compendiums produced on international income and taxes, on tax-
exempt organizations and, soon,  on estate tax returns and personal
wealth. They can all be obtained by contacting the SOI Statistical
Information Services staff on (202) 874-0410 or FAXing them on
(202) 874-0922. 

We hope this look backwards and ahead will be of interest and use
to you as custmers of our data. Perhaps our stroll down memory lane
will help provide greater insight into the changes our data have
gone through and a better sense of where we need to go. As always,
we welcome both your reminiscences about the past as it relates to
SOI data and your suggestions for the future.
The following are some of the articles planned for inclusion in
upcoming issues of the SOI Bulletin: 

 Early Economic Estimates, Individual Income Tax Returns, 1992; 

 Excise Taxes, Fiscal Year 1992; 

 Sole Proprietorships, 1991; and 

 Partnerships, 1991. 

The SOI program highlights presented here focus on events that have
had an impact on the organization, the studies conducted and the
technologies employed. These highlights are not meant to encompass
all the significant events during the past 80 years, nor to
overlook the names of individuals who made it all happen; only the
names of SOI Division Heads (Directors) are mentioned.  The
Beginning After an 18-year lapse in the Federal income tax, the
16th Amendment to the Constitution became effective early in 1913.
This Amendment gave Congress the authority to tax incomes.  1913 On
October 3, Congress enacted the first modern income tax law, which
imposed a tax on the net income  of both individuals and
corporations. 

1916  On September 8, Congress enacted the Revenue Act of 1916,
which, in addition to increasing tax rates and creating an estate
tax, provided for ...the preparation and publication of statistics
reasonably available with respect to the operation of the income
tax law and containing classifications of taxpayers and of
income...and any other facts deemed pertinent and valuable... 
Reports were to be made annually by the Commissioner of Internal
Revenue with the approval of the Secretary of the Treasury. (A
similar statement has appeared in each major rewrite of the tax
laws since 1916, most recently in the Internal Revenue Code of
1986.)

The Early Years, 1917-1929 
In this period, the new organization produced its first SOI
reports, one for each year. Early on, each was preceded by a
preliminary  report. Sampling of tax returns was introduced as the
basis for the individual income tax return statistics, and
punchcard equipment was installed for use in data processing.  1917
The Statistical Division was created. 

1918  The first Head of IRS statistical operations, Dr. Edward
White, was selected.  The first SOI report, relating to personal
and corporate income tax returns filed for 1916, was released in
June. This report contained some earlier-year statistics on the
income tax back to 1913.  The Annual Report of the Commissioner of
Internal Revenue for 1918 provides the reasons for the extensive
geographic data that appear in the early SOI reports (continuing
into the late 1920s):  The value of comparative statistical data,
classified by states and collection districts relating to
collection from particular sources can hardly be overestimated.
Such compilations will reveal, subject to the weight that must be
given to known differences in economic conditions, the states and
collection districts in which the enforcement of the tax laws is
exceptionally efficient. Furthermore, analysis of these
compilations are almost indispensable to controlling expenditures
for various administrative purposes in the several collection
districts.  The extensive geographic tabulations by collection
district was also a carryover from earlier years when annual
collections served as the basis for determining the salaries of
district directors. 

  Sampling of lower-income individual income tax returns for SOI
was instituted.
 
1919  From the 1919 Annual Report of the Commissioner of Internal
Revenue.  The preparation of the publication Statistics of Income,
a compilation of statistics based on the data selected from the
returns of income and profits, involves continuously a large amount
of work on the part of the Statistical Division of the
Income Tax Unit, which is also required from time to time to
undertake special statistical studies related to the work of
the unit. The Statistics of Income for 1917 were published in time
for their utilization at the October 6 industrial
conference in Washington. A large amount of work was required for
the compilation of medians for use in the application
of the statutory provision (c-2 of section 311, Revenue Act of
1918) for determining the war profits credit of corporations which
were not in existence during the whole of at least one calendar
period.  The first SOI data on sole proprietorships were published
for 1917. (Sole proprietorship data were then published, in varying
detail, for each year through 1939. Thereafter, they were produced
only occasionally until 1956, when the annual program was revived.)

1922  As a result of a reorganization, the Statistical Division was
renamed the Statistical Section (although it remained in the Income
Tax Unit, the organization through which tax returns were routed
for audit purposes). 

1923  The SOI report for 1921 (and several others that followed)
presented counts of individual income tax returns by county and
city based on index cards maintained in each district office. 

1925  Complete income statements were published for corporations
for the first time for 1922.  The first SOI data were published on
estate tax returns, for 1916-1922. (The estate tax return program
then continued on an annual basis for more than 25 years. It was
then changed to an occasional program before, again returning to an
annual program; see below.)  

1926  The use of systematic stratified sampling was described in
the SOI report for 1925 as follows: a fair average sample of the
returns filed by persons having net income of less than $5,000
approximating 250,000 returns are sent in to the Bureau by the 64
collectors offices and are analyzed for information bearing on this
income class, the data fairly representing the distribution of
income of all the returns filed having net income of less than
$5,000.  The first gift tax return statistics were published, based
on returns filed in 1925, following enactment of the gift tax in
1924. (This program continued almost annually until 1966. During
the 1950s, the statistics were generally published together with
estate tax return data in a separate SOI report.)  1928 Balance
sheet statistics for corporations were published for the first time
for 1926, following a change in the tax return form that required
the reporting of assets and liabilities.  The first Source Book of
corporation income tax return data was compiled. It provided data
for 1926 by more detailed industry groupings than were published,
by size of net income. (The Source Book was compiled each year
thereafter, except for 1952. For the more recent years, it presents
detailed industry data by size of total assets.) 1929 It is not
known exactly when punchcards and machine tabulating equipment were
introduced, but mention of their use is noted in the SOI report for
1928, most of the processing for which occurred in 1929. (Up until
then, data were compiled either manually or on mechanical
equipment.) 

The Depression Years, 1930-1939 
A major expansion in the uses of SOI occurred during this decade,
principally as a result of new programs and studies.
The Work Projects Administration (WPA) and the institution of the
first U.S. system of national accounts were especially
important. 1934 -  In response to a need for more detailed income
statistics, not only for use in tax research but also 1936 as
benchmarks for the national income accounts, two voluminous studies
were conducted principally for 1934 and 1936. These studies were
produced in Philadelphia under the direction of the Treasury
Departments Division of Tax Research (the forerunner of the present
Office of Tax Analysis) and financed by the Work Projects
Administration (WPA).  The project broke new ground in terms of
producing data that were more relevant for revenue estimation and
tax legislative purposes than data previously produced. These
included cross-tabulations and more detailed information on the
distribution and sources of income and on patterns of income than
were available in SOI, by detailed size and geographical
classifications. Included was an early study of capital gains and
losses, with data by asset types and length of holding period. Four
separate SOI supplemental reports of individual income tax return
data summarized the results. For corporations,
cross-classifications of data were produced by industry and size
and extensive use was made of frequencies. Included was the only
comprehensive SOI study to date comparing book and tax profits. All
tabulations were manually compiled and hand-posted. The design of
many of these tabulations became the prototypes of tables which
were presented annually or periodically in later SOI reports,
especially in those of the 1950s and 1960s. 

1936  For the first time, two separate SOI reports were issued for
1934, one for individuals and one for corporations. 

The War Years and the Aftermath, 1940-1949 
Substantial changes were made in the tax laws of the early 1940s to
increase revenue in order to finance additional expenditures
incurred as a result of the war effort. There was a major increase
in tax rates; a broadening of the individual income tax base so
that for the first time it covered nearly all of the population,
instead of just the wealthy; a reduction in personal exemptions;
and a sharp growth in income. As a result, the decade that ended in
1949 witnessed a tremendous growth in the filing of individual
income tax returns, from fewer than 8 million for Tax Year 1939 to
almost 52 million for Tax Year 1949. 

1940   The first fiduciary income tax returns statistics were
published for 1937.  (Previously, income and tax reported by
taxable estates and trusts were reported on individual income tax
returns. The fiduciary income tax return program continued on an
annual basis until 1952; since then, it has been repeated only on
a cycled or occasional basis.) 

1943  The increased workload caused by the growth in individual
income tax returns filings led to the adoption of more
sophisticated sample designs and stratified systematic sampling as
it is known today was implemented for the first time.  Measures of
sampling variability were also computed for the first time and
published in the 1943 SOI. 

1945  The first detailed partnership statistics were published for
1939.  (The partnership program was regarded only as a special
study, to be undertaken on an occasional basis. It became an annual
program starting with 1956.) 

1946  The first Head of SOI, Dr. Edward White, retired in 1946
after 28 years and was replaced by James Turner, an IRS employee
credited with the development of the standard deduction. At this
time, the name of the organization was changed from Statistical
Section to Statistical Division.  

1949  Bryce Bratt replaced James Turner as Head of the Statistical
Division. 

The Advent of Automatic Data Processing (ADP), 1950-1959 
One of the major effects of the rapid growth in the number of
returns filed was a delay in the publication of the annual
SOI reports. There was a tremendous backlog of work in the years
immediately following World War II. In addition, the SOI programs
had expanded to cover other types of returns, the tax laws had
grown more complicated and so had the tax returns as a result, and
the number of data items required by the Treasurys Tax Analysis
Staff had increased substantially. More detailed tabulations were
required that exceeded the capabilities of the tabulating equipment
then being used. These detailed tabulations were often based on
schedules in support of totals reported elsewhere in the tax
return. In addition, samping, which had been limited to individual
income tax returns, was extended to corporation income tax returns
and then returns used for other SOI programs.  1951 Sampling of
corporation income tax returns was instituted for the first time
for Tax Year 1951. 

1953  Ernest Engquist, a statistician with the Bureau of the
Census, was hired as the Director of the renamed Statistics
Division to replace Bryce Bratt. Under Dr. Engquist, an
organization of professional statisticians, grouped along subject
matter lines, gradually replaced the previous organization which
was largely clerical. A staff of mathematical statisticians with
experience in sampling and other statistical techniques was added. 
The sizes of the individual and corporate samples were gradually
reduced and sampling was extended to most other SOI programs. The
sample selection process was improved with the cooperation of the
IRS field offices in which the returns were located. However, all
returns selected for SOI continued to be transmitted to the
Statistics Division in Washington, D.C., for processing.
Publications were streamlined as a means of improving their
timeliness. Gradually, the backlog of statistical processing and
SOI reports was reduced so that, by the late 1950s, the program was
again on schedule. 

1954  The Bureau of the Census purchased two UNIVAC I computers;
the Statistics Division assisted by funding half the cost of one of
them for use in SOI. (This was the first IRS computer and the first
IRS computer application.) A staff of computer programmers and
systems analysts was gradually added to the Division. The advent of
the computer was to revolutionize SOI processing.  
Congress enacted the Internal Revenue Code of 1954 which was to
dictate, to a large extent, the scope and size of SOI programs for
years to come. 

1955  The first early IRS area service center, in Kansas City,
Missouri, was created for administrative processing of individual
income tax returns.  This was later followed by centers in
Lawrence, Massachusetts, and Ogden, Utah. Although SOI processing
continued to be centralized in Washington, the Lawrence area center
began to assist in keypunching and other clerical work.  

1956  The first taxpayer usage study was undertaken. For these
studies, a small sample of tax returns was selected early in
administrative processing to provide IRS with a quick glimpse of
the reporting practices of taxpayers during the filing season.
These intermittent studies covered different types of tax returns.
(Starting with 1969, taxpayer usage studies of individual income
tax returns became annual.) 

1957  The first SOI report on farmers cooperatives was published
for 1953.  
  (The publication was issued only once thereafter, for 1963.) 

1958  At the request of the Joint Committee on Internal Revenue
Taxation, special tabulations of individual income tax return data
were compiled starting with 1957, based on an early cutoff of
sample receipts. These Advance Data tabulations enabled the first
statistics for a given tax year to become available before the end
of the year in which the returns were filed; these early
tabulations continue to this day. (The sample used then became the
basis for the SOI preliminary  statistics.) 

1959  Most of the manual processing of individual income tax
returns was transferred to the three area service centers.
Keypunching had already been transferred, starting with 1957. 

Meeting Treasury Needs and the First Tax Model,  1960-1969 

The 1960s were characterized by the increased need for data for use
in revenue estimating and for determining tax policy, both within
and outside the Treasury Department. Pre-conceived tables could no
longer meet the need for ad-hoc tabulations, and a demand grew for
the capability to produce estimates based on simulations. To meet
these requirements, as well as the Office of Tax Analysis need for
special studies of capital gains, depletion and depreciation,
the professional staff of the Statistics Division doubled in the
early 1960s. The 1960s also witnessed the virtual completion of the
movement of manual statistical processing from the Statistics
Division to field locations, as well as the shift of SOI computer
operations to the new Detroit Data Center. 

The early 1960s were followed by a period of generally shrinking
budgets. Balance had to be struck between the available resources
and the increased workload that resulted from the growing number of
returns filed and the program expansion that had occurred in the
early 1960s in response to the increase in Treasury requests for
special studies. Many of these studies have continued to the
present. The impact of special studies on the regular programs was
such that these programs began to slip behind schedule, again.
Adapting to (and having to deal with problems associated with) the
new decentralized system of processing continued to have a negative
impact on the schedule for publishing the SOI
reports. 

1960 The third annual SOI report, U.S. Business Income Tax Returns,
was introduced for 1957. It was based on new annual programs on
sole proprietorships and partnerships, authorized and funded by the
then Budget Bureau to support Commerce Department data needs for
the national income accounts. Also instituted were special
tabulations of corporate data based on an early cutoff of sample
receipts, also for use in the national accounts.  The first results
of these three studies were produced for 1956 in the unpublished
annual Selected Financial Data  series. (The corporate sample used
for this purpose was then also used to produce the published 
preliminary  statistics for 1962-1980.) 

1961  A variety of special Treasury studies was implemented in
anticipation of tax reform. Included were the corporate
foreign tax credit, sales of capital assets, depreciation and
depletion, all of which placed a strain on the existing programs
and staff. For this purpose, the SOI budget was increased, and the
SOI professional staff needed to plan and manage
these projects doubled.
   
1962  At the request of the Office of Tax Analysis, SOI developed
its first so-called tax model,  based on 1960 individual income tax
returns. The model concept involved creation of a computer file of
statistically sampled tax returns associated with a generalized 
computer program capable of simulating the probable results of a
wide variety of possible tax law changes, singly or in combination.
(Later, the tax modeling function was transferred to the Office of
Tax Analysis, with SOIs role limited to that of providing a data
file based on the SOI sample of returns; it was this file that was
input to the model.  This same file became the basis of the first
SOI public use file of tax returns for statistical use, sanitied to
protect taxpayer confidentiality.)  

  Public Law 87-870 was enacted, enabling IRS, including SOI, to
receive reimbursement for special studies, compilations and
services. Over the years, SOI reimbursable work has expanded
considerably, now including projects undertaken for the Commerce
Department in support of the national accounts.  

  The first formal SOI quality control program was initiated
concurrent with complete implementation of decentralized
manual processing. It was characterized by independent verification
by the SOI Division of samples of work done in the field, and
continuous feedback; the field sites were also required to perform
continuous systematic reviews. This was in addition to the
computerized validity checks of the transcribed data that began in
the 1950s. (Previously, data had been manually checked, generally
by 100-percent verification.) 

  The first individual income tax returns supplement on sales of
capital assets was published for 1959 (although a somewhat similar
report had been published as a by-product of a Work Projects
Administration study for 1936; sales of capital assets continue to
be a special SOI study to this day). 

1962  A reorganization separated the responsibility for most IRS
internal management statistics 1965 from that of the basic SOI
program. (Among the projects transferred was the Annual Report of
the Commissioner of Internal Revenue, preparation and publication
of which was formerly an SOI responsibility.) 

1963  W. Edwards Deming, the noted authority on quality, conducted
a study of SOI sampling and sampling procedures.

1964  One of the several physical moves the Statistics Division
made during its long history was to the aging Pension Building in
downtown Washington, D.C., where it was located for about 4 years.
The screams of statistical clerks were not unusual when an
occasional rat was noticed scurrying beneath the desks; pigeons
often flew in through the open or broken windows near the
high-vaulted ceiling, requiring some to keep umbrellas open over
their desks during the day (and to cover their desks at night with
sheets). 

1964 - 1965  Dr. Engquist died early in 1964, and was replaced as
SOI Director by Vito Natrella, a statistician formerly with the
Securities and Exchange Commission.

1965  IRS Data Center in Detroit (now the Detroit Computing Center)
became operational. All SOI computer work was gradually transferred
to the Data Center in succeeding years. Manual processing for many
studies, including that for corporations and partnerships, was also
shifted to that location. (In recent years, there has been a shift
back to SOI Division of most of the systems development and
computer operations. With the advent of personal computers, this
trend is expected to continue.) 

1966  With the advent of ADP nationwide in all IRS service centers,
the use of the computer to identify the returns to be selected for
the SOI individual income tax return sample became possible;
formerly this operation was manual. (Computer designation was
gradually extended to other SOI programs and enabled more
sophisticated designs to be implemented. This helped offset some of
the effects of the sample reductions necessitated by budget
considerations.)  A special SOI supplement on depletion claimed for
1960 was issued. This was a one-time study. 

1967  The first SOI estimates of personal wealth were published,
based on estate tax returns for 1962.  (This program continues, as
a by-product of the estate tax return SOI program.) 

  The first corporation SOI supplemental report on the foreign tax
credit was published for 1961.  (This program has continued on a
cycled basis.) 

1969  A geographic supplement to the individual income tax return
statistics was published for 1966, by ZIP Code area. This report
was based on the Master File of all taxpayers. (The initial report
was roundly criticized by many as a misuse of the ZIP Code which
would only promote junk mail. A few years later, data by county
were published, based on the county identification then required on
the tax return for use in the revenue sharing  program with the
States.) 

  The first corporation SOI supplemental report on Controlled
Foreign Corporations was published for 1962. (This program has
continued on a cycled basis.)  

The Era of Increased Special Studies, 1970-1979 
During the 1970s, the focus of the SOI program was increasingly
directed to fulfilling the requests for special statistics by
Treasurys Office of Tax Analysis. The data were needed to help
evaluate specific domestic and foreign tax policy issues and many
resulted from Congressionally-mandated requirements for Treasury
reports to evaluate the effectiveness of various new provisions of
the tax law. As a result of these initiatives, the dimensions of
the overall SOI program were widened to encompass such topics as
high-income taxpayers, income of citizens working abroad, taxation
of corporate income from U.S. possessions, international boycott
participation, employee benefit plans and private foundations.
During the 1970s, the relative size of the SOI budget continued to
decline. SOI samples were generally reduced in size, partly for
this reason and partly because resources had to be found with which
to fund the new statistics needed by the Office of Tax Analysis.
Frequently, schedules for completing the regular individual and
corporate programs suffered.
  
1974   The concept of a Master File was adopted by IRS in the late
1950s and was implemented nationwide in the case of individual
income taxpayers in the late 1960s. Files for other taxpayers
followed. It was not until 1974, however, that it was considered
practicable to use some of the administrative data recorded in the
Master File system for returns included in the SOI sample. These
data were used either to augment or replace individual income tax
return data that previously had been processed independently,
although in some cases the administrative data had to be edited 
for statistical use. When this process proved to be cost effective,
additional data items for these returns were obtained in a similar
manner. (Use of Master File data for the partnership SOI program
did not begin until Tax Year 1981, followed by corporations and the
other SOI programs starting in the mid-1980s.) 

1979  Steps were begun to assure that a degree of longitudinality
was built into the SOI sample of individual income tax returns,
partly to improve the statistical estimates of year-to-year change
and partly to meet an Office of Tax Analysis need to be able to
trace the tax behavior of identical taxpayers over time. 

Systems and Program Changes, 1980-Present  
The period starting with 1980 has been characterized by the need to
accommodate new program demands with only minimal increases in
budget. To do this, fundamental changes have had to be made  in
the SOI samples, in content of certain programs, in program cycles
and publications, and in manual and ADP processing. The beginnings
of these latter changes had already taken place when data from the
Master File system began to be used for SOI individual income tax
return program; during the early- and mid-1980s, this practice was
extended to the corporation and other SOI programs as well. The
next change, from manual to electronic data retrieval, again,
revolutionized the nature of SOI processing.

The great increase in the Divisions hands-on accessibility to
computers has been one of the keystones. The new environment
utilizes new technology, on-line  processing in the IRS service
centers (whereby all steps in statistical processing were
accomplished in a single operation), and quality reviews that
emphasize problem prevention and improved training. 
Projects on sole proprietorships and partnerships in support of the
national accounts, heretofore funded at the same level as that
originally established in the 1950s, have been placed on a
reimbursable basis, with part of the cost charged to the Commerce
Department.  Preliminary corporation data were dropped, only to be
revived in the early 1990s, mainly in support of the national
accounts, with funding provided by the Commerce Department. Based
on user priorities, farm data have been cancelled.  The
publications program has been revised to eliminate the preliminary 
reports for corporations and individuals, the publications covering
unincorporated businesses and all SOI supplemental reports.  A new
quarterly report, the Statistics of Income Bulletin, has been
created as the vehicle for publishing more limited data on topics
formerly covered by these separate reports, as well as to provide
results of the growing number of special projects. It was evident
that SOI was publishing far more data than most users could absorb,
that this was contributing to the publications being behind
schedule, and that the principal Federal Government customers
often preferred having access to the underlying tax return data
(when they were allowed a choice), rather than the detailed
aggregates in table form. The published output of the individual
and corporate programs has therefore been streamlined, improving
timeliness of the publications, and bringing them back on schedule,
again. The cost of producing data for publications containing a
reduced number of tables and consisting of more general-purpose
statistics has been far less than it formerly was, and is far less
time-consuming to produce. These tables (together with the reports,
themselves) are now readied for publication through electronic
techniques, enabling SOI to produce high-quality publication-ready
tables itself. 

1980   Fritz Scheuren, a statistician formerly with the Social
Security Administration, was selected as SOI director, following
the retirement of Vito Natrella after 15 years. It became Dr.
Scheurens responsibility to come up with innovative solutions to
modernize SOI and its processing technology, while accommodating
the additional data requirements of its principal customers at the
least possible cost to the IRS.  

   The first meeting of the Statistics of Income Consultants Panel
convened. The Panel was charged with commenting on the current SOI
program, emphasizing future directions and changes. A major
objective was to involve customers who were academics and business
representatives (in addition to tax policymakers) in the SOI work
processes. 

1987   One of the methods chosen to improve SOI processes was to
create quality planning teams ; one of the first was charged with
working with customers to improve the individual income tax
return sample design. This successful initiative was implemented
for 1988. One of the results is that tax families  are now
represented in the sample, linked together by the social security
numbers of dependents reported on the tax return. 

1988   SOI adopted the total quality organization  (TQO) concept.
Under TQO, problem prevention and a focus on customer needs are
stressed and the total organization (people, processes, facilities,
equipment and environment) is considered. The main strategy is
working with utside customers and suppliers to assure that the
goals and needs of all are taken into account (in terms of
quantity, quality and timeliness), while at the same time
satisfying the needs of internal customers (employees). A TQO
plan is drawn up each year that identifies vital business issues
and key activities which are addressed by manager/employee
cross-functional teams. 

1989   To improve service to customers, a centralized statistical
information office was created to answer telephone and written
requests for SOI data. 

1992   The SOI Division instituted an electronic bulletin board to
help meet customer requests for data. 