Many non-filers will need help in taking that first step back, and I hope that in the weeks ahead we can discuss various ways that you can offer your help and encouragement to them, also. I would also like to discuss Compliance 2000 in another context of enforcement activities and that is penalty administration. Any sound tax system incorporates penalties. Without them, taxpayers could take improper reporting positions with relative impunity. The consequences of being caught would be no worse than if the taxpayer had complied in the first instance.
Penalties change that calculus and make noncompliance the risk that it ought to be.
But as you know, the penalty system grew increasingly complex during the last two decades. By 1988, that number had grown to 150. Complexity generated a lack of uniformity and began to setback the compliance purpose of penalties. We are taking a big step to fix that misdirection with our new policy statement and handbook dealing with penalties. The policy statement and the handbook are in printing and will be distributed within the next few weeks.