jurisdiction: US

text: b' Trends in Compliance Activities\n Through Fiscal Year 2004\n\n March 2005\n\n Reference Number: 2005-30-055\n\n\n\n\nThis report has cleared the Treasury Inspector General for Tax Administration disclosure\nreview process and information determined to be restricted from public release has been\n redacted from this document.\n\x0c DEPARTMENT OF THE TREASURY\n WASHINGTON, D.C. 20220\n\n\n\n\nINSPECTOR GENERAL\n for TAX\n ADMINISTRATION\n\n\n\n\n March 30, 2005\n\n\n MEMORANDUM FOR DEPUTY COMMISSIONER FOR SERVICES AND\n ENFORCEMENT\n\n\n FROM: Pamela J. Gardiner\n Deputy Inspector General for Audit\n\n SUBJECT: Final Audit Report \xe2\x80\x93 Trends in Compliance Activities Through\n Fiscal Year 2004 (Audit # 200530009)\n\n\n This report presents the results of our review of statistical information that reflects\n activities of the Collection and Examination functions. The overall objective of this\n review was to provide statistical information requested by the Internal Revenue Service\n (IRS) Oversight Board and provide trend analyses of that information.\n In summary, the IRS\xe2\x80\x99 overall Fiscal Year (FY) 2004 compliance efforts and results were\n mixed but showed some continuing positive changes that started in FY 2001.\n Specifically, the level of compliance activities and the results obtained in many\n Collection function areas in FY 2004 showed a continued increase and the number of\n Collection function field staff increased slightly. Most enforcement actions were higher\n in FY 2004 compared to those in FY 2003, but they have not returned to pre-1998\n levels. Enforcement revenue collected increased substantially in FY 2004, but the total\n amount of uncollected liabilities also increased. However, the gap between new\n delinquent accounts and account closures decreased slightly.\n The Collection function collected 10 percent more in FY 2004 than in FY 2003;\n however, the number of taxpayers and the amount owed on accounts in the Queue1\n increased. While this inventory is now a major source of work for Collection Field\n function employees, a significant amount may still never be worked. In addition, a\n significant number of accounts were shelved (removed) from collection inventory and\n may never be worked. The IRS received authority and will begin testing the use of\n contract staff to work some cases. It is too early to tell if the contract resources will be\n\n\n 1\n The Queue is a holding file for unassigned inventory. Some of the inventory is considered lower priority, but other\n inventory is placed in the file until it can be assigned as workload for Collection function employees.\n\x0c 2\n\nable to resolve a significant number of cases or whether they will continue to not be\nworked.\nExamination function staffing increased during FY 2004, as did the percent of tax\nreturns examined. The increase was mainly due to increases in correspondence\nexaminations of tax returns for individuals, which are conducted by mailing notices to\nthe taxpayer and are usually not as comprehensive as face-to-face examinations.\nWhile the number of examinations of individuals increased overall during FY 2004, a\nlarger increase occurred in the coverage rate of individuals earning $100,000 and over\nthan for those earning under $100,000. Correspondence examination accounted for\n85 percent of the examinations of individuals with incomes under $100,000 in FY 2004\nand 64 percent for those with incomes $100,000 and over. In addition, yield indicators\nfor the Examination function continued to decrease in FY 2004 for individual income tax\nreturn examinations.\nThe number of examinations of corporate tax returns continued the decrease that\nstarted in FY 1997, decreasing a total of 75 percent since that time. The total number\nof tax returns examined decreased from 1 out of 52 returns filed in FY 1997 to 1 out of\n245 returns filed in FY 2004.2 This trend did turn around for examinations of larger\ncorporations though. The number of examinations for corporate tax returns with assets\n$10 million and greater increased 34 percent during FY 2004. Yield indicators also\nsignificantly increased in FY 2004. This improvement is mainly due to the combined\neffect of the increase in the number of examinations of large corporate tax returns\n(those with assets of $10 million and greater) and the increase in the amount of the tax\nadjustment on those tax returns during FY 2004.\nDuring the last few years, the IRS has been implementing reengineering suggestions\naimed at increasing effectiveness of enforcement efforts. We have conducted several\nreviews of these initiatives; however, it is too early to evaluate the full impact of these\nchanges. Despite efforts the IRS has taken to improve its enforcement efforts, the\nGovernment Accountability Office (GAO) continues to regard enforcement of tax laws\nas 1 of the 25 high-risk areas in the Federal Government in its January 2005 update.3\nThe President\xe2\x80\x99s proposed FY 2006 budget also addresses the issue by providing\nadditional funds for enforcement resources.\nWe made no recommendations in this report. However, key IRS management officials\nreviewed it prior to issuance.\nCopies of this report are also being sent to the IRS managers affected by the report\nfindings. Please contact me at (202) 622-6510 if you have questions or\n\n\n2\n The IRS attributes part of this decrease since FY 2002 to examinations of individual income tax returns as part of\nthe National Research Project.\n3\n HIGH-RISK SERIES \xe2\x80\x93 An Update (GAO-05-207, dated January 2005).\n\x0c 2\n\nPhilip Shropshire, Acting Assistant Inspector General for Audit (Small Business and\nCorporate Programs), at (215) 516-2341.\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\n\n\n\n Table of Contents\n\n\nBackground ............................................................................................... Page 1\nOverall Compliance Indicators Show Mixed Results ................................. Page 1\nMany Collection Function Compliance Indicators Improved in\nFiscal Year 2004 ....................................................................................... Page 2\nSome Examination Function Compliance Indicators Improved; Others\nContinued to Decline in Fiscal Year 2004 ................................................. Page 6\nAppendix I \xe2\x80\x93 Detailed Objective, Scope, and Methodology....................... Page 13\nAppendix II \xe2\x80\x93 Major Contributors to This Report ....................................... Page 14\nAppendix III \xe2\x80\x93 Report Distribution List ....................................................... Page 15\nAppendix IV \xe2\x80\x93 Glossary of Terms.............................................................. Page 16\nAppendix V \xe2\x80\x93 Detailed Charts of Statistical Information ............................ Page 18\nAppendix VI \xe2\x80\x93 Related Treasury Inspector General for Tax\nAdministration Audit Reports..................................................................... Page 47\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\n We initiated this review of nationwide compliance statistics\nBackground\n for examination and collection activities at the request of the\n Internal Revenue Service (IRS) Oversight Board. Our data\n analyses were performed in the Treasury Inspector General\n for Tax Administration (TIGTA) Chicago office during the\n period December 2004 through February 2005 using\n national Management Information System reports. The\n audit was performed in accordance with Government\n Auditing Standards. However, we relied on information\n accumulated by the IRS in established reports and did not\n verify its accuracy.\n Much of the data included in this report are a follow-up to\n prior TIGTA audit reports on compliance trends. See\n Appendix VI for a listing of these reports.\n Detailed information on our audit objective, scope, and\n methodology is presented in Appendix I. Major\n contributors to the report are listed in Appendix II. Detailed\n charts and tables referred to in the body of this report are\n included in Appendix V. Many of the calculations\n throughout the report and Appendix V are affected by\n rounding. All initial calculations were performed using the\n actual numbers rather than the rounded numbers that appear\n in the report.\n The combined Collection and Examination functions\nOverall Compliance Indicators\n enforcement staffing declined from approximately 22,200 at\nShow Mixed Results\n the beginning of Fiscal Year (FY) 1996 to 14,700 at the end\n of FY 2004, a 34 percent decrease. However, staffing\n increased by 5 percent during FY 2004, the first time that\n has occurred since prior to FY 1996. The President\xe2\x80\x99s\n FY 2005 proposed budget provided for an increase in\n enforcement staffing, but the Congress did not approve the\n additional funding and did not include an amount to cover\n increased salaries due to the cost of living adjustment. As a\n result, attrition may again outpace hiring. The President\xe2\x80\x99s\n proposed budget for FY 2006 again includes an increase for\n enforcement staffing.\n For some time, the number of tax returns filed and the total\n dollars the IRS received increased annually with the\n growing economy. In the past 8 years, the number of tax\n returns filed grew by 12 percent, from 155 million in\n Calendar Year (CY) 1995 to 173 million in CY 2003. From\n FYs 1996 to 2001, the amount of revenue received by the\n Page 1\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\n IRS grew from $1.49 to $2.13 trillion, but then fell by a\n total of 8 percent during FYs 2002 and 2003, to\n $1.95 trillion.1 These were the first decreases in total\n revenue since FY 1983. In FY 2004 it rebounded to\n $2.02 trillion.\n The amount of enforcement revenue collected increased by\n 15 percent in FY 2004, to $43.1 billion,2 and the amount\n (not adjusted for inflation) is 14 percent higher than the\n FY 1996 level. The increase in FY 2004 is due to a\n 33 percent increase in the amount collected on business\n accounts, which was the top priority for the Collection Field\n function (CFf) during the year.\n Starting in FY 2001, the IRS began to reverse some of the\n downward trends in compliance indicators that had occurred\n in prior years. In FY 2004, some of these indicators\n continued to increase while others fell slightly from the\n prior year. Despite work the IRS is doing to improve its\n enforcement efforts, the Government Accountability Office\n (GAO) continues to regard enforcement of tax laws as 1 of\n the 25 high-risk areas in all of Federal Government in its\n January 2005 update.3 The GAO noted, \xe2\x80\x9cThe\n Commissioner of Internal Revenue has made strengthening\n enforcement a high priority, but [the] IRS has not yet\n materially reversed enforcement declines.\xe2\x80\x9d As this report\n points out, this is especially true within the Examination\n function.\n The CFf Revenue Officer staffing levels increased slightly\nMany Collection Function\n in FY 2004, with 3,789 field Revenue Officers as of the end\nCompliance Indicators Improved\n of the fiscal year.4 However, Revenue Officer staffing is\nin Fiscal Year 2004\n down by 36 percent from the start of FY 1996. Results\n from many Collection function operations showed\n improvement during FY 2004, while the results of other\n operations were not positive.\n Many Collection function operations showed\n improvement\n Many indicators showed positive results for Collection\n function compliance activity during FY 2004.\n\n 1\n See Appendix V, Figure 1.\n 2\n See Appendix V, Figure 3.\n 3\n HIGH-RISK SERIES \xe2\x80\x93 An Update (GAO-05-207, dated January 2005).\n 4\n See Appendix V, Figure 5.\n Page 2\n\x0cTrends in Compliance Activities Through Fiscal Year 2004\n\n \xe2\x80\xa2 Total dollars collected on Taxpayer Delinquent\n Accounts (TDA) by the Automated Collection\n System (ACS) and the CFf employees during\n FY 2004 was $5.1 billion, an increase of 10 percent\n from FY 2003.5 The FY 2004 amount is up\n 40 percent from the 9-year low that occurred in\n FY 2000.\n \xe2\x80\xa2 The average amount collected per CFf staff year on\n TDAs increased by 66 percent to $449,474 in\n FY 2004 from a low in FY 1999.6 The increase from\n FY 2003 to FY 2004 alone was $33,024 (8 percent).\n \xe2\x80\xa2 The number of TDAs closed, excluding shelved\n accounts, and the number closed by full payment\n increased by 14 percent and 10 percent, respectively,\n from FY 2003 to FY 2004.7 The FY 2004 volumes\n are the highest levels since FY 1997.\n \xe2\x80\xa2 The number of Taxpayer Delinquency\n Investigations (TDI) closed by the ACS and the CFf\n with a tax return secured or a tax return posted\n increased by 16 percent from FY 2003 to FY 2004.\n While there were still more TDA receipts than closures\n during FY 2004, the gap between TDA receipts and\n TDA closures narrowed again.8 The gap lowered to\n 862,355 accounts as of the end of the fiscal year, lower\n than at the end of any fiscal year since FY 1998.\n Use of collection enforcement tools including levies and\n seizures increased substantially from lows experienced in\n FY 2000.9 However, the numbers are still substantially\n lower than their pre-1998 levels.\n\n\n\n\n 5\n See Appendix V, Figure 9.\n 6\n See Appendix V, Figure 8.\n 7\n See Appendix V, Figures 14 and 15.\n 8\n See Appendix V, Figure 12.\n 9\n See Appendix V, Figures 17 and 18.\n Page 3\n\x0cTrends in Compliance Activities Through Fiscal Year 2004\n\n Figure 1: Use of Collection Function Enforcement Tools\n Levies Seizures\n FY 96 3,108,926 10,449\n FY 97 3,659,417 10,090\n FY 98 2,503,409 2,307\n FY 99 504,403 161\n FY 00 219,778 74\n FY 01 674,080 234\n FY 02 1,283,742 296\n FY 03 1,680,844 399\n FY 04 2,029,613 440\n Source: Collection Report 5000-23, Customer Service Activity Report,\n and IRS Manual Reconciliation of Seizure Logs.\n\n Some of these positive changes may be attributed to\n management emphasis on the collection programs, including\n the implementation of the Small Business/Self-Employed\n (SB/SE) Division Collection Reengineering initiatives\n during the past few years. Some changes recommended by\n the Collection Reengineering initiatives and subsequent\n revisions to the recommendations could have impacted the\n collection compliance indicators. We have issued audit\n reports on some of these changes including the case\n prioritization, case selection process, and group manager\n involvement initiatives. See Appendix VI for a listing of\n these audit reports. While it appears these efforts have had\n a positive impact on collection statistics, the Collection\n function should continue to monitor impacts of the changes\n to ensure the positive trend continues.\n The results were not positive for some Collection\n function operations\n Some indicators showed negative results for Collection\n function compliance activity during FY 2004.\n \xe2\x80\xa2 The amount of gross accounts receivable increased\n by 2 percent during FY 2004.10 This occurred even\n though enforcement revenue showed a sharp\n increase.\n \xe2\x80\xa2 The number of liens issued by the CFf and the ACS\n decreased by 2 percent.11 While the number issued\n by the ACS increased by 1 percent, the number\n\n\n 10\n See Appendix V, Figure 3.\n 11\n See Appendix V, Figure 16.\n Page 4\n\x0cTrends in Compliance Activities Through Fiscal Year 2004\n\n issued by the CFf decreased by 5 percent.\n However, the total number of liens issued in\n FY 2004 was still 218 percent higher than the low\n in FY 1999.\n The inventory of unassigned collection cases is maintained\n in the Queue. Except for a couple of slight dips, the number\n of taxpayers with unpaid accounts in the Queue12 and the\n amount owed on these accounts has steadily increased since\n FY 1996.13 During FY 2004 the number of accounts\n increased by 5 percent to 623,477. At the same time, the\n amount owed increased by 12 percent to $21 billion. While\n the number of taxpayers with unfiled tax returns decreased\n by 13 percent to 838,090 in FY 2004, there was a large\n increase in the number of these accounts that were shelved\n or surveyed (removed from inventory) during the year.14\n Although many of the cases in the Queue may be assigned\n to be worked, a significant amount may still never be\n worked.\n The Queue inventory figures do not include the millions of\n unpaid tax periods and unfiled return investigations shelved\n or surveyed (removed) from Collection function inventory\n during the last 4 years. From FY 2001 through FY 2004,\n approximately 5.4 million TDAs15 with balance due\n amounts totaling more than $22.9 billion were removed\n from Collection function inventory. During the same\n period, more than 12.9 million TDI tax periods were\n removed. These cases were removed from Collection\n function inventory because they were considered less\n productive and may never be worked.\n The Collection function is not able to work all of the\n existing accounts in the Queue with current staffing, and, as\n noted in the preceding section, the number of TDA receipts\n is outpacing closures. If changes do not occur, a significant\n number of cases will continue to not be worked. This\n reinforces the need for additional resources to work the\n\n\n 12\n An inventory of unassigned collection cases is maintained in the\n Queue. Historically, the Queue was not a major source for active\n workload, but was the source for 49 percent of the CFf workload during\n FY 2004.\n 13\n See Appendix V, Figure 13.\n 14\n See Appendix V, Figure 10.\n 15\n See Appendix V, Figure 11.\n Page 5\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\n cases. As noted previously, the FY 2005 budget proposal\n for increased tax law enforcement funding was not\n approved. However, the President\xe2\x80\x99s budget proposal for\n FY 2006 again requests additional funding for enforcement.\n In addition, legislation was passed allowing the IRS to use\n contract staff to work some cases. The IRS is working on\n procedures to implement the process and plans to start\n testing it later this fiscal year.\n The Collection function should continue to monitor these\n indicators to ensure they show positive results as\n enforcement is emphasized.\n Overall, the number of Examination function staff that\nSome Examination Function\n conduct examinations of tax returns increased slightly in\nCompliance Indicators Improved;\n FY 2004. The number of Revenue Agents (RA) increased\nOthers Continued to Decline in\n to 9,787, while the number of Tax Compliance Officers\nFiscal Year 2004\n (TCO) (formerly referred to as Tax Auditors) declined\n slightly to 987 as of the end of FY 2004.16 However, there\n has been a 33 percent decrease in the number of examiners\n in field offices since the start of FY 1996.\n Examinations of individual income tax returns increased in\n FY 2004 compared to FY 2003, but the number of corporate\n tax return examinations continued to decline. Additionally,\n examiners in the field offices are spending more time\n examining individual income tax returns, resulting in a\n decrease in the per hour yield.17 Examinations of other\n types of returns also showed an increase in time spent per\n tax return, but they showed a corresponding increase in the\n yield.18\n The Examination function also implemented changes from\n the Examination Reengineering initiative. We have issued\n reports on some of these initiatives including the field\n examination reengineering pilot, office audit redesign pilot,\n and high income tax strategy. See Appendix VI for a listing\n of these audit reports. While initial results were mixed, it\n still may be too early to realize the full impact of the\n initiatives that were implemented to improve the\n Examination function\xe2\x80\x99s effectiveness.\n\n\n\n 16\n See Appendix V, Figure 4.\n 17\n See Appendix V, Figures 20 and 23.\n 18\n See Appendix V, Figures 21 and 22.\n Page 6\n\x0cTrends in Compliance Activities Through Fiscal Year 2004\n\n Examination of tax returns\n When analyzing examination coverage rates, it is important\n to recognize differences in the types of contacts that are\n counted in Examination function statistics. Examinations\n range from an IRS notice asking for clarification of a single\n tax return item that appears to be incorrect (correspondence\n examination) to a full face-to-face interview and review of\n the taxpayer\xe2\x80\x99s records. Face-to-face examinations are\n generally more comprehensive and time-consuming for the\n IRS and the taxpayers, and they typically result in higher\n dollar adjustments to the tax amounts. Thus, caution should\n be used when combining statistics from the various\n Examination function programs and tax classes into overall\n examination rates. In addition, the IRS uses several\n computer-matching and automated error-checking routines\n in the computing centers to check the accuracy of tax\n returns. Many of these result in adjustments to tax liabilities\n but are not included in the traditional \xe2\x80\x9caudit rates\xe2\x80\x9d and are\n not generally reported separately as enforcement efforts.\n The overall percentage of tax returns examined19 increased\n by 16 percent from FY 2003 to FY 2004 and has increased\n by 29 percent since FY 2000. However, the rate is still\n 55 percent lower than it was in FY 1996. The 29 percent\n increase in the examination rate from FY 2000 was\n primarily due to an increase in the number of examinations\n of income tax returns for individuals. Examinations of other\n types of tax returns did not change significantly or\n continued to decrease.\n The IRS attributed the decreases in examinations in part to a\n decline in and a reallocation of resources.20 While\n Examination staffing increased slightly during FY 2004, the\n Congress did not approve the additional funds requested for\n tax law enforcement in the FY 2005 budget which could\n result in limited hiring and a decrease in staffing once\n attrition and retirements are taken into account. The IRS\n Oversight Board voiced concerns over the IRS\xe2\x80\x99 FY 2005\n budget passed by the Congress saying that the lack of\n\n 19\n Percentage of examination coverage has traditionally been calculated\n by the IRS by dividing the number of returns examined in the current\n fiscal year by the number of returns filed in the preceding calendar year.\n 20\n Report to Congress: IRS Tax Compliance Activities\n (dated July 15, 2003).\n Page 7\n\x0cTrends in Compliance Activities Through Fiscal Year 2004\n\n funding will cause the IRS to fall short of key goals and\n weaken the IRS.\n Figure 2 below compares the change in field Examination\n function staffing to the change in examinations for all types\n of tax returns by field employees.\n Figure 2: Percentage Change in Field Examiners and Examinations\n Total Field Examiners Total Field Examinations\n 10%\n\n 0%\n\n -10%\n\n -20%\n\n -30%\n\n -40%\n\n -50%\n\n -60%\n\n -70%\n\n -80%\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: IRS Data Book and Examination Table 37.\n\n Continued effort to increase the examination coverage is\n important to the effectiveness of the voluntary compliance\n system. Studies of taxpayer attitudes show 17 percent of\n taxpayers felt it was acceptable to cheat on their tax returns\n in CY 2003, compared to 11 percent 4 years earlier.21 Also,\n fear of examination is an increasing factor in influencing\n taxpayers to report taxes honestly. In CY 2002, 29 percent\n of taxpayers surveyed cited fear of examination as a factor\n that influenced their voluntary compliance. This increased\n to 37 percent in CY 2003.\n Individual Income Tax Examinations \xe2\x80\x93 Overall, the number\n of examinations of all types of individual income tax returns\n decreased from FY 1997 through FY 2000. However, the\n downward trend was reversed in FY 2001 when the number\n of examinations in most categories increased from the prior\n years. During FY 2000, only 1 in 202 individual income tax\n returns were examined, this increased to 1 in 129 during\n FY 2004.\n\n\n\n 21\n 2003 IRS Oversight Board Annual Survey on Taxpayer Attitudes\n (dated September 2003).\n Page 8\n\x0cTrends in Compliance Activities Through Fiscal Year 2004\n\n \xe2\x80\xa2 The number of individual income tax returns\n examined increased from 617,765 in FY 2000 to\n 1,007,874 in FY 2004,22 with 81 percent of those\n examined in FY 2004 done by correspondence.\n \xe2\x80\xa2 The number of examinations of individual income\n tax returns with income under $100,000 increased\n from 518,218 (1 in 221 tax returns filed) in FY 2000\n to 812,778 (1 in 144 tax returns filed) in FY 2004.23\n This increase was entirely due to an increase in the\n number of correspondence examinations which\n accounted for 85 percent of the examinations in this\n income category. The number of face-to-face\n examinations decreased by 29 percent. Only 1 in\n 1,129 individual income tax returns filed with\n income under $100,000 receives a face-to-face\n examination.\n \xe2\x80\xa2 The number of examinations of individual income\n tax returns with income of $100,000 and over\n increased from 99,547 (1 in 104 tax returns filed) in\n FY 2000 to 195,096 (1 in 68 tax returns filed) in\n FY 2004.24 Most (91 percent) of this increase was\n due to an increase in the number of correspondence\n examinations which accounted for 64 percent of the\n examinations in this income category. Only\n 9 percent was due to the increase in the number of\n face-to-face examinations. Only 1 in 201 individual\n income tax returns filed with income of $100,000\n and over receives a face-to-face examination.\n The Earned Income Tax Credit (EITC) issues made up a\n substantial portion of the individual income tax examination\n cases for FYs 2000 through 2004 in the lower income\n categories and accounted for about 44 percent of the\n examinations of individuals overall during FY 2004.\n Excluding examinations where EITC was an issue, the\n number of examinations of individuals with income under\n $100,000 increased 50 percent from 250,248 in FY 2000 to\n 375,753 in FY 2004, and the number with income $100,000\n\n\n\n 22\n See Appendix V, Figure 24.\n 23\n See Appendix V, Figures 24 and 25.\n 24\n See Appendix V, Figures 24 and 25.\n Page 9\n\x0cTrends in Compliance Activities Through Fiscal Year 2004\n\n and over increased 93 percent from 98,983 in FY 2000 to\n 190,929 in FY 2004.\n Corporate Income Tax Examinations \xe2\x80\x93 The number of\n examinations of all corporation income tax returns\n decreased 23 percent in FY 2004 and has decreased\n continuously since FY 1997, decreasing a total of 75 percent\n since that time.25 The total number of tax returns examined\n decreased from 93,548 (1 out of 52 returns filed) in\n FY 1997 to 23,499 (1 out of 245 returns filed) in FY 2004.26\n However, there was a 34 percent increase of examinations\n of corporate tax returns with assets of $10 million and over\n during FY 2004. While this is a notable change,\n examinations of these returns is still down 27 percent since\n FY 1997.\n Partnership Return Examinations \xe2\x80\x93 The number of\n partnership returns examined decreased 21 percent in\n FY 2004, but only decreased 5 percent since FY 2000.27\n The IRS is starting to plan a research project to study the\n compliance of entities such as partnerships where the\n income flows through to other entities. There is concern\n that the Examination function will not have sufficient\n resources to conduct a statistically valid sample of these\n returns, even if those selected for examination through\n normal processes are included in the results. This concern\n could grow if there are further drops in the number routinely\n selected for examination.\n Other Tax Types Examinations (Fiduciary, Employment,\n Excise, Estate, and Gift Taxes) \xe2\x80\x93 The overall number of\n examinations in these 5 classes increased by 7 percent\n during FY 2004, but is down 10 percent since FY 2000.\n The number of examinations in each class except excise is\n below the FY 2000 level. However, from FY 2003 to\n FY 2004 there were increases in the number of\n examinations of employment, excise, and gift tax returns.28\n\n\n\n 25\n The IRS attributes part of this decrease since FY 2002 to\n examinations of individual income tax returns as part of the National\n Research Project.\n 26\n See Appendix V, Figures 37 to 39 and Figure 50, for coverage by size\n of corporation.\n 27\n See Appendix V, Figures 40 and 50.\n 28\n See Appendix V, Figures 41 to 45 and 50.\n Page 10\n\x0cTrends in Compliance Activities Through Fiscal Year 2004\n\n Examination function yield indicators\n Yield indicators for the Examination function decreased\n from FY 1996 to FY 2004 for individual income tax return\n examinations.29 While the dollar results from examinations\n per tax return examined fluctuated up and down during the\n period, the number of hours used to examine each tax return\n increased substantially. The net effect is a decrease in dollar\n results per hour spent examining tax returns.\n However, as the result of a drastic change during FY 2004,\n the dollar result per hour spent examining corporate tax\n returns almost doubled and had a net effect of a 57 percent\n increase since FY 1996.30 This occurred even though the\n average hours spent examining each return increased by\n 19 percent during FY 2004 and by 145 percent since\n FY 1996. The drastic improvement in dollar results is\n mainly due to the combined effect of the increase in the\n number of examinations of large corporate tax returns (those\n with assets of $10 million and over) and the increase in the\n assessments on those tax returns during FY 2004.\n Figure 3 shows the impact on the results per hour from\n FY 1996 to FY 2004 for RAs and TCOs on individual and\n corporate tax returns.\n Figure 3: Examination Function Yield Per Hour\n RA - Individual TCO - Individual RA - Corporate\n\n $1,800\n\n\n $1,600\n\n\n $1,400\n\n\n $1,200\n\n\n $1,000\n\n\n $800\n\n\n $600\n\n\n $400\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: TIGTA Analysis of Examination Table 37.\n\n A large portion of the increase in hours spent examining tax\n returns occurred since FY 2002. This could be partially\n attributed to the type of cases that were being worked. The\n\n\n 29\n See Appendix V, Figures 20 and 23.\n 30\n See Appendix V, Figure 21.\n Page 11\n\x0cTrends in Compliance Activities Through Fiscal Year 2004\n\n SB/SE Division high-priority cases31 require in-depth\n probing in an attempt to identify unreported income and to\n determine reporting compliance. In addition, larger\n corporate tax return examinations are more complex and\n require more time to complete.\n Compliance initiatives\n Over the last few years the Examination function has been\n making changes to try to address taxpayer compliance more\n effectively and efficiently. The full impact of these changes\n may not yet be known.\n The IRS should continue to monitor the outcome of these\n initiatives to ensure they result in more effective and\n efficient operations. If measures show decreases in\n effectiveness or efficiency, management needs to reassess\n the strategies and make changes where necessary.\n In addition to the efficiency increases projected by the\n initiatives mentioned above, the Commissioner has\n indicated his commitment to improving compliance while\n also maintaining a high level of customer service. As\n shown previously in this report, the Congress did not\n approve the large increase proposed for tax law enforcement\n for FY 2005, but the President\xe2\x80\x99s proposed budget for\n FY 2006 again includes an increase to the IRS\xe2\x80\x99 tax\n enforcement budget. Additional resources should help turn\n around the decreases in examination coverage that have\n occurred on almost every type of tax return since FY 1996.\n\n\n\n\n 31\n These priorities include offshore credit card users; high-risk,\n high-income taxpayers; abusive schemes and promoter investigations;\n high-income nonfilers; unreported income; and the National Research\n Program.\n\n\n\n\n Page 12\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\n Appendix I\n\n\n Detailed Objective, Scope, and Methodology\n\nThe overall objective of this review was to provide statistical information requested by the\nInternal Revenue Service (IRS) Oversight Board and provide trend analyses of that information.\nTo accomplish our objective, we analyzed the IRS\xe2\x80\x99 management information reports to\ndetermine the trends and changes in the major areas of compliance. We relied on information\naccumulated by the IRS in established reports and did not verify its accuracy. The major issues\nwe focused on included:\n \xe2\x80\xa2 Enforcement Revenue and Gross Accounts Receivable.\n \xe2\x80\xa2 Collection and Examination functions staffing.\n \xe2\x80\xa2 Collection and Examination functions direct time.\n \xe2\x80\xa2 Collection function delinquent account inventories and unfiled return investigations.\n \xe2\x80\xa2 Collection function enforcement actions (liens, levies, and seizures).\n \xe2\x80\xa2 Examination function coverage of individual and business tax returns compared to the\n number of returns filed in each category.\n \xe2\x80\xa2 Examination function productivity results for individual and business tax returns.\n \xe2\x80\xa2 Other activity resulting in improving the accuracy of filed tax returns and filing of\n delinquent returns.\n\n\n\n\n Page 13\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\n Appendix II\n\n\n Major Contributors to This Report\n\nPhilip Shropshire, Acting Assistant Inspector General for Audit (Small Business and Corporate\nPrograms)\nParker F. Pearson, Director\nAmy L. Coleman, Audit Manager\nJoseph P. Snyder, Lead Auditor\nUna K. Smith, Senior Auditor\nJanis Zuika, Auditor\n\n\n\n\n Page 14\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\n Appendix III\n\n\n Report Distribution List\n\nCommissioner C\nOffice of the Commissioner \xe2\x80\x93 Attn: Chief of Staff C\nCommissioner, Large and Mid-Size Business Division SE:LM\nCommissioner, Small Business/Self-Employed Division SE:S\nCommissioner, Wage and Investment Division SE:W\nDeputy Commissioner, Large and Mid-Size Business Division SE:LM\nDeputy Commissioner, Small Business/Self-Employed Division SE:S\nDeputy Commissioner, Wage and Investment Division SE:W\nChief Counsel CC\nNational Taxpayer Advocate TA\nDirector, Office of Legislative Affairs CL:LA\nDirector, Office of Program Evaluation and Risk Analysis RAS:O\nOffice of Management Controls OS:CFO:AR:M\nAudit Liaisons:\n Commissioner, Large and Mid-Size Business Division SE:LM\n Commissioner, Small Business/Self-Employed Division SE:S\n Commissioner, Wage and Investment Division SE:W\n\n\n\n\n Page 15\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\n Appendix IV\n\n\n Glossary of Terms\n\nAutomated Collection System (ACS) \xe2\x80\x93 A telephone contact system through which telephone\nassistors collect unpaid taxes and secure tax returns from delinquent taxpayers who have not\ncomplied with previous notices.\nAutomated Substitute for Return (ASFR) system \xe2\x80\x93 Designed to assess taxes on wage earners\nwho fail to file tax returns. It analyzes information submitted to the Internal Revenue Service\n(IRS) and historical tax returns information.\nBalance Sheet \xe2\x80\x93 A statement of the financial assets and liabilities of a business at a given date\nfiled with a corporate income tax return; used by the IRS to group businesses by the size of their\nassets.\nCollection Field function (CFf) \xe2\x80\x93 The unit in the Area Offices consisting of Revenue Officers\nwho handle personal contacts with taxpayers to collect delinquent accounts or secure unfiled tax\nreturns.\nCorporate Income Tax Returns \xe2\x80\x93 U.S. Corporation Income Tax Returns (Form 1120) are\nreturns used by corporations to report the corporate income tax.\nEarned Income Tax Credit (EITC) \xe2\x80\x93 A tax credit for certain people who work and have\nincome under established limits.\nEmployment Tax Returns \xe2\x80\x93 Various Form 940 return series (primarily Form 940 and\nForm 941) filed by businesses to report things such as Employer\xe2\x80\x99s Federal Unemployment Taxes\nand Federal Taxes Withheld.\nEnforcement revenue \xe2\x80\x93 This is any tax, penalty, or interest received from a taxpayer as a result\nof an IRS enforcement action (usually an examination or a collection action).\nEstate Tax Return \xe2\x80\x93 United States Estate (and Generation-Skipping Transfer) Tax Return\n(Form 706) is the form to be filed on certain estates of deceased persons.\nExamination (Face-to-Face) \xe2\x80\x93 Field examinations of individuals, partnerships, and corporations\nthat occur either at the taxpayer\xe2\x80\x99s place of business or through interviews at an IRS office.\nExcise Tax Return \xe2\x80\x93 Quarterly Federal Excise Tax Return (Form 720) is used to report and pay\ncertain taxes such as those on transportation and fuel.\nFiduciary Income Tax Return \xe2\x80\x93 Income tax returns filed for estates and trusts.\nGift Tax Return \xe2\x80\x93 United States Gift (and Generation-Skipping Transfer) Tax Return\n(Form 709) is used to report transfers subject to the Federal gift taxes and to figure the tax\ndue on those transfers.\nGross accounts receivable \xe2\x80\x93 Includes all unpaid tax, with accrued penalties and interest, on\ntaxpayers\xe2\x80\x99 delinquent accounts.\n Page 16\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nIndividual Income Tax Returns \xe2\x80\x93 U.S. Individual Income Tax Returns (Form 1040 series) are\nannual income tax returns filed by citizens or residents of the United States.\nMath Error \xe2\x80\x93 A program with which the IRS contacts taxpayers through the mail or by\ntelephone when it identifies mathematical errors or mismatches of taxpayer information that\nwould result in a tax change.\nPartnership Returns \xe2\x80\x93 U.S. Return of Partnership Income (Form 1065) is used to report the\nincome and expenses of domestic partnerships and the share distributed to the partners.\nQueue \xe2\x80\x93 An automated holding file for unassigned inventory of lower priority delinquent cases\nthat the Collection function does not have enough resources to immediately assign for contact.\nRevenue Agent \xe2\x80\x93 Employees in the Examination function that conduct face-to-face\nexaminations of more complex tax returns such as businesses, partnerships, corporations, and\nspecialty taxes, e.g., excise tax returns.\nRevenue Officer \xe2\x80\x93 Employees in the CFf who attempt to contact taxpayers and resolve\ncollection matters that have not been resolved through notices sent by the IRS campuses\n(formerly known as service centers) or the ACS.\nS Corporation Tax Return \xe2\x80\x93 U.S. Income Tax Return for an S Corporation (Form 1120S) is\nfiled by qualifying small business corporations and includes amounts distributed to shareholders.\nService Center Collection Branch (SCCB) \xe2\x80\x93 Mails the balance due and return delinquency\nnotices to taxpayers and analyzes and responds to taxpayer correspondence.\nShelved or surveyed cases \xe2\x80\x93 These are delinquent unpaid accounts or investigations of unfiled\ntax returns that have been taken out of Collection function inventory because they are lower\npriority.\nTax Compliance Officer/Tax Auditor \xe2\x80\x93 Employees in the Examination function that conduct\nmostly examinations of individual taxpayers through interviews at IRS field offices. The\nposition title was changed in 2002 from Tax Auditor to Tax Compliance Officer.\nTaxpayer Delinquent Account (TDA) \xe2\x80\x93 A balance due account of a taxpayer.\nTaxpayer Delinquency Investigation (TDI) \xe2\x80\x93 An unfiled tax return for a taxpayer.\nTax Period \xe2\x80\x93 The term tax period refers to each tax return filed by the taxpayer for a specific\nperiod (year or quarter) during a calendar year for each type of tax.\nTotal Gross Receipts (TGR) \xe2\x80\x93 The categories used for Individual Income Tax Returns with\nProfit or Loss From Business (Schedule C) or Profit or Loss From Farming (Schedule F) income\nbased on the total receipts reported.\nUnderreporter \xe2\x80\x93 The Underreporter Program matches items reported on individual income tax\nreturns to information supplied to the IRS from outside sources (such as from employers, banks,\nand credit unions) to determine if the taxpayer\xe2\x80\x99s tax return reflected the correct amounts,\nensuring that the taxpayer\xe2\x80\x99s tax amount is correct.\n\n\n Page 17\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\n Appendix V\n\n\n Detailed Charts of Statistical Information\n\nFigure 1 \xe2\x80\x93 Internal Revenue Service (IRS) Gross Collections by Type of Tax\n Since Fiscal Year (FY) 1996.............................................................................Page 21\n\nFigure 2 \xe2\x80\x93 Change in Enforcement Revenue and Gross Accounts\n Receivable \xe2\x80\x93 Percentage Change From FY 1996............................................Page 21\n\nFigure 3 \xe2\x80\x93 Amounts of Enforcement Revenue Collected Compared to\n Growth in Gross Accounts Receivable .............................................................Page 22\n\nFigure 4 \xe2\x80\x93 Examination Function Staffing at the End of Each Fiscal Year........................Page 22\n\nFigure 5 \xe2\x80\x93 Collection Field function (CFf) Revenue Officer Staffing at the End of\n Each Fiscal Year...............................................................................................Page 23\n\nFigure 6 \xe2\x80\x93 Staff Years Detailed to Customer Service........................................................Page 23\n\nFigure 7 \xe2\x80\x93 Changes in Direct Time Percentages...............................................................Page 24\n\nFigure 8 \xe2\x80\x93 Average Dollars Collected per Staff Year on Taxpayer Delinquent\n Accounts (TDA) by the CFf...............................................................................Page 24\n\nFigure 9 \xe2\x80\x93 Total Dollars Collected on TDAs by the CFf and the Automated Collection\n System (ACS) ...................................................................................................Page 25\n\nFigure 10 \xe2\x80\x93 Delinquent Accounts in the Queue.................................................................Page 25\n\nFigure 11 \xe2\x80\x93 Delinquent Accounts and Unfiled Return Investigations Shelved or\n Surveyed Each Year .......................................................................................Page 26\n\nFigure 12 \xe2\x80\x93 Gap Between New Delinquent Accounts and Account Closures ...................Page 26\n\nFigure 13 \xe2\x80\x93 Number of Taxpayers and Amounts Owed in the Queue ..............................Page 27\n\nFigure 14 \xe2\x80\x93 Number of Delinquent Accounts Closed Each Year, Excluding\n Shelved Accounts ...........................................................................................Page 27\n\nFigure 15 \xe2\x80\x93 Number of Delinquent Accounts Closed by Full Payment .............................Page 28\n\nFigure 16 \xe2\x80\x93 Liens Filed by the CFf and ACS .....................................................................Page 28\n\nFigure 17 \xe2\x80\x93 Levies Issued by the CFf and ACS ................................................................Page 29\n\nFigure 18 \xe2\x80\x93 Number of Seizures Made Each Fiscal Year .................................................Page 29\n\nFigure 19 \xe2\x80\x93 Examination Coverage of All Tax Returns \xe2\x80\x93 Percentage Change From\n FY 1996...........................................................................................................Page 30\n\nFigure 20 \xe2\x80\x93 Revenue Agent Results on U.S. Individual Income Tax\n Returns (Form 1040), Excluding Training Returns \xe2\x80\x93 Percentage\n Change From FY 1996 ...................................................................................Page 30\n Page 18\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 21 \xe2\x80\x93 Revenue Agent Results on Corporate Income Tax Returns, Excluding\n Training Returns \xe2\x80\x93 Percentage Change From FY 1996 .................................Page 31\n\nFigure 22 \xe2\x80\x93 Revenue Agent Results on Other Types of Tax Returns, Excluding\n Training Returns \xe2\x80\x93 Percentage Change From FY 1996 .................................Page 31\n\nFigure 23 \xe2\x80\x93 Tax Compliance Officer Results on Forms 1040, Excluding Training\n Returns \xe2\x80\x93 Percentage Change From FY 1996 ...............................................Page 32\n\nFigure 24 \xe2\x80\x93 Number of Forms 1040 Examined Face-to-Face or Through\n Correspondence .............................................................................................Page 32\n\nFigure 25 \xe2\x80\x93 Percentage of Forms 1040 Examined Face-to-Face or\n Through Correspondence ...............................................................................Page 33\n\nFigure 26 \xe2\x80\x93 Number of Forms 1040 Examined by Compliance Center\n Correspondence .............................................................................................Page 33\n\nFigure 27 \xe2\x80\x93 Number of Forms 1040 Examined by Field Offices .......................................Page 34\n\nFigure 28 \xe2\x80\x93 Percentage of Forms 1040 Examined............................................................Page 34\n\nFigure 29 \xe2\x80\x93 Percentage Examined \xe2\x80\x93 Forms 1040 With No Business or Farm Income.....Page 35\n\nFigure 30 \xe2\x80\x93 Examination Coverage of Non-business Forms 1040 \xe2\x80\x93 Under $100,000......Page 35\n\nFigure 31 \xe2\x80\x93 Examination Coverage of Non-business Forms 1040 \xe2\x80\x93 $100,000\n and Over .........................................................................................................Page 36\n\nFigure 32 \xe2\x80\x93 Examination Coverage of Forms 1040 With Business Income\n (Excluding Farms)...........................................................................................Page 36\n\nFigure 33 \xe2\x80\x93 Examination Coverage of Forms 1040 With Farm Income ............................Page 37\n\nFigure 34 \xe2\x80\x93 Examination Coverage of All Corporate Income Tax Returns \xe2\x80\x93\n Percentage Change From FY 1996................................................................Page 37\n\nFigure 35 \xe2\x80\x93 Percentage of Corporate Income Tax Returns Examined \xe2\x80\x93\n Corporations With Assets Under $10 Million ..................................................Page 38\n\nFigure 36 \xe2\x80\x93 Percentage of Corporate Income Tax Returns Examined \xe2\x80\x93\n Corporations With Assets $10 Million and Over .............................................Page 38\n\nFigure 37 \xe2\x80\x93 Examination Coverage of Corporations With Assets Under $10 Million ........Page 39\n\nFigure 38 \xe2\x80\x93 Examination Coverage of Corporations With Assets $10 Million and Over ...Page 39\n\nFigure 39 \xe2\x80\x93 Examination Coverage of U.S. Income Tax Return for an\n S Corporation (Forms 1120S).........................................................................Page 40\n\nFigure 40 \xe2\x80\x93 Examination Coverage of Partnership Income Tax Returns ..........................Page 40\n\nFigure 41 \xe2\x80\x93 Examination Coverage of Fiduciary Income Tax Returns..............................Page 41\n\nFigure 42 \xe2\x80\x93 Examination Coverage of Employment Tax Returns .....................................Page 41\n\nFigure 43 \xe2\x80\x93 Examination Coverage of Excise Tax Returns...............................................Page 42\n\n Page 19\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 44 \xe2\x80\x93 Examination Coverage of Estate Tax Returns ...............................................Page 42\n\nFigure 45 \xe2\x80\x93 Examination Coverage of Gift Tax Returns....................................................Page 43\n\nFigure 46 \xe2\x80\x93 Other Compliance Contacts on Forms 1040 ..................................................Page 43\n\nFigure 47 \xe2\x80\x93 Other Compliance Contacts \xe2\x80\x93 Percentage of Coverage on Forms 1040.......Page 44\n\nFigure 48 \xe2\x80\x93 Numbers and Percentages of Other Compliance Contacts\n on Forms 1040................................................................................................Page 44\n\nFigure 49 \xe2\x80\x93 Numbers and Percentages of Examinations on Forms 1040 ........................Page 45\n\nFigure 50 - Numbers and Percentages of Examinations on Business Tax Returns .........Page 46\n\n\n\n\n Page 20\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 1. Internal Revenue Service (IRS) Gross Collections by Type of Tax Since Fiscal\nYear (FY) 1996. Gross tax collections overall rose slightly in FY 2004, but decreased a total of\n5 percent since FY 2001. Individual income tax collections decreased by 16 percent and\nemployment tax collection increased by 5 percent from FY 2001 to FY 2004. Individual income\ntaxes make up about one-half of the total collections, while employment taxes account for about\none-third.\n 2.5\n\n\n\n 2.0 Excise Taxes\n\n\n Estate & Gift\n Trillions of Dollars\n\n\n\n\n 1.5\n\n\n Employment\n 1.0 Taxes\n\n Corporate\n Income\n 0.5\n Individual\n Income\n 0.0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n Source: Treasury Inspector General for Tax Administration (TIGTA) Analysis of IRS Data Book Information.\n\nFigure 2. Change in Enforcement Revenue and Gross Accounts Receivable \xe2\x80\x93 Percentage\nChange From FY 1996. Enforcement revenue increased sharply in FY 2004 and surpassed the\nFY 1996 figure by 14 percent. Gross accounts receivable increased in FY 2004 and is up\n32 percent since FY 1996.\n Gross Accounts Receivable Enforcement Revenue\n 35%\n\n 30%\n 32%\n 22% 28% 29% 29%\n 25%\n 19%\n 20%\n 14%\n 15%\n 9% 14%\n 10%\n\n 5%\n -1%\n 0%\n\n -5% -2%\n -10%\n -7%\n -11% -11% -10%\n -15%\n -13%\n -20%\n FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04\n\n Source: TIGTA Analysis of Enforcement Revenue Information System and Chief Financial Officer (CFO)\n Financial Report.\n Page 21\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 3. Amounts of Enforcement Revenue Collected Compared to Growth in Gross\nAccounts Receivable. Enforcement revenue collected increased sharply during FY 2004, by\n15 percent. Even so, gross accounts receivable still increased 2 percent in FY 2004.\n Enforcement Revenue Gross Accounts Receivable\n\n $46 $290\n\n\n\n\n Billions\n $280 $285\n $280\n Billions\n\n\n\n\n $44\n $276 $278 $43.10\n $270\n\n\n\n\n Gross Accounts Receivable\n $42\n $264\n Enforcement Revenue\n\n\n\n\n $260\n $40 $257\n\n $37.96 $250\n $246\n $38\n $37.25 $37.63\n $240\n $236\n $36\n $35.20 $230\n $33.80 $33.78 $34.09\n $34 $220\n $216\n $32 $32.94 $210\n FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04\n\n Source: Enforcement Revenue Information System and CFO Financial Reports.\n\n\nFigure 4. Examination Function Staffing at the End of Each Fiscal Year. The numbers in\nthis chart represent the number of Examination function staff actually conducting examinations\nof tax returns. For the first time in many years, Revenue Agent staffing increased during\nFY 2004. However, Tax Compliance Officer (formerly referred to as Tax Auditor) staffing\ncontinued to decline.\n Revenue Agents Tax Compliance Officers\n 14,000\n 13,857\n 12,000 12,685\n 11,912 11,591\n 10,000 11,014\n 10,381 9,994 9,776 9,787\n 8,000 9,244\n\n 6,000\n\n 4,000\n 2,468 2,197 2,011 1,850 1,650\n 2,000 1,393 1,190 1,148 1,041 987\n\n 0\n FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Examination Table 37.\n\n\n\n\n Page 22\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 5. Collection Field function (CFf) Revenue Officer Staffing at the End of Each\nFiscal Year. The number of Revenue Officers working delinquent accounts increased by\n8 percent during FY 2004, but is still 36 percent fewer than at the start of FY 1996.\n 6,000\n 5,908\n 5,000 5,537 5,439\n 4,989\n 4,000 4,354\n 3,792 3,789\n 3,601 3,495 3,499\n 3,000\n\n 2,000\n\n 1,000\n\n 0\n FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Report 5000-23.\n\nFigure 6. Staff Years Detailed to Customer Service. The number of staff years detailed to\ncustomer service dropped off again in FY 2004 and is lower than those detailed during FY 1996.\n Collection Examination\n 700\n 646\n 600\n\n 500 468\n\n\n 400\n 338 323\n 288\n 300\n\n 183 174\n 200 154 167\n\n 104\n 88 82\n 100 78 60\n 43 30\n 15 3\n 0\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Report 5000-23 and Examination Table 37.\n\n\n\n\n Page 23\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 7. Changes in Direct Time Percentages. The Collection and Examination functions\nboth increased the percentage of overall time charged to their tax related responsibilities\n(collecting taxes, securing tax returns not timely filed, and examining tax returns) since FY 2000.\nThe Examination and Collection functions changed what types of time they capture as direct and\nindirect in recent years, including capturing some of the previous indirect time as direct. The\ngraph below depicts our recalculation of direct time based on direct time categories from prior\nyears so the data is consistent for the 9 years included in the chart.\n Examination Collection\n 65%\n\n 60%\n\n 55%\n\n 50%\n\n 45%\n\n 40%\n\n 35%\n\n 30%\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: TIGTA Analysis of Collection Report 5000-23 and Examination Table 37.\n\nFigure 8. Average Dollars Collected per Staff Year on Taxpayer Delinquent Accounts\n(TDA) by the CFf. The average amount collected by the CFf for each staff year increased by\n8 percent from FY 2003 to FY 2004 and a total of 66 percent since FY 1999.\n $500,000\n\n\n\n $450,000\n $449,474\n\n\n $400,000 $416,450\n\n\n $375,337\n $350,000 $360,781\n $336,959 $336,758 $337,721\n\n $300,000\n $293,686\n $271,110\n $250,000\n\n\n\n $200,000\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: TIGTA Analysis of Collection Reports 5000-2 and 5000-23.\n\n\n Page 24\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 9. Total Dollars Collected on TDAs by the CFf and the Automated Collection\nSystem (ACS). Except for FY 2002 when the amount collected by the ACS dropped back\nslightly, the amounts collected by the ACS and CFf have grown constantly since FY 2000. Since\nthen, the ACS amount collected has increased by 44 percent, while the amount collected by the\nCFf has increased by 39 percent.\n CFf Amount Collected ACS Amount Collected\n\n $7,000,000\n Thousands of Dollars Collected\n\n\n\n\n $6,000,000 $2,296,880\n $2,317,426\n\n $2,078,191\n $5,000,000\n $1,669,735\n $1,515,953\n $4,000,000\n $3,984,172 $1,442,540 $1,275,111 $1,249,261\n $3,778,441\n $1,159,473\n $3,000,000 $3,365,075 $3,392,249\n $3,083,984\n $2,677,226 $2,746,646\n $2,477,034 $2,447,824\n $2,000,000\n\n\n $1,000,000\n\n\n $0\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Report 5000-2.\n\nFigure 10. Delinquent Accounts in the Queue. The number of taxpayers with unpaid tax\nliabilities and investigations of unfiled tax returns in the Queue increased significantly from\nFY 1996 through FY 2000. There were large reductions from the inventory during FYs 2000\nthrough 2004 because the IRS used a special closing code to remove potentially less productive\ncases from the Queue (see Figure 11).\n TPs with Unpaid Accounts TPs with Unfiled Returns\n2,000,000\n\n1,800,000 1,876,629\n\n1,600,000\n\n1,400,000 1,282,919\n\n1,200,000\n 959,075\n1,000,000\n 821,188 838,090\n 767,459\n 800,000\n\n 600,000\n 435,337 456,711 591,372 623,477\n 537,781 542,406 514,915\n 400,000 326,118\n 425,780 407,210 445,877\n\n 200,000 317,865\n\n 0\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Reports 5000-2 and 5000-4.\n\n\n\n Page 25\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 11. Delinquent Accounts and Unfiled Return Investigations Shelved or Surveyed\nEach Year. Since FY 1999, the IRS has used special closing codes to remove millions of\nunpaid tax periods and unfiled return investigations from the Queue.\n Unpaid Accounts Unfiled Returns\n8,000,000\n\n 7,099,437\n7,000,000\n\n\n6,000,000\n\n\n5,000,000\n\n\n4,000,000\n\n\n3,000,000\n 2,197,857\n 1,942,929 1,749,590 1,875,353\n 1,720,683\n2,000,000\n 981,255 1,567,023\n 931,011 1,089,580 1,020,503\n1,000,000 790,729\n 142,891\n 42,956 46,349\n 7,737 3,705 13,702\n 0\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Reports 5000-2 and 5000-4.\n\nFigure 12. Gap Between New Delinquent Accounts and Account Closures. The gap\nbetween unpaid account receipts and closures decreased again for FY 2004, but the number of\nreceipts has been greater than the number of closures each year since FY 1997. The closures\nincluded here do not include the unpaid accounts shelved, shown above in Figure 11.\n TDA Receipts TDA Closures\n 6,000,000\n\n\n 5,000,000\n\n\n 4,000,000\n\n\n 3,000,000\n\n\n 2,000,000\n\n\n 1,000,000\n\n\n 0\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Report 5000-2.\n\n\n\n\n Page 26\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 13. Number of Taxpayers and Amounts Owed in the Queue. The number of\ntaxpayers with unpaid accounts in the Queue increased by 5 percent, while the average amount\nowed increased by 12 percent from FY 2003 to FY 2004.\n Amount Owed Number of Taxpayers\n $35 650,000\n\n\n $30 600,000\n Amount Owed ($ in Billions)\n\n\n\n\n $25 550,000\n\n\n\n\n Number of Taxpayers\n $20 500,000\n\n\n $15 450,000\n\n\n $10 400,000\n\n\n $5 350,000\n\n\n $0 300,000\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Report 5000-2.\n\nFigure 14. Number of Delinquent Accounts Closed Each Year, Excluding Shelved\nAccounts. The number of delinquent unpaid accounts closed by the ACS and CFf showed\nsignificant increases in FY 2004. In addition, as more accounts are left in the Queue, there are\nmore closed after voluntary action by taxpayers while in that unassigned status.\n ACS CFf Queue & SCCB\n\n 3,500,000\n 3,129,974 3,201,808\n 2,922,041\n 3,000,000 2,814,025\n 2,555,754\n 2,500,000\n 2,013,562 1,975,215\n 2,000,000 1,873,520 1,819,424\n 1,696,008 1,676,949\n\n 1,500,000 1,327,863\n\n 951,984 880,939 955,887\n 1,000,000 771,455 757,392 724,430\n 469,695\n 500,000 314,124 370,217\n 269,855\n 164,731 133,905 146,807 128,930 180,991\n\n 0\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Report 5000-2.\n\n\n\n\n Page 27\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 15. Number of Delinquent Accounts Closed by Full Payment. The number of\naccounts closed by full payment increased in FY 2004. There has been a steady increase since\nFY 2000 for the CFf and the Queue. The ACS number dropped in FY 2002, but has increased\nsubstantially during the last 2 years.\n ACS CFf Queue & SCCB\n1,000,000\n 901,145 893,620\n 900,000\n 793,958 784,124\n 800,000 742,563 723,659\n 688,622 679,872\n 700,000 644,301\n\n 600,000\n 481,409 494,567\n 500,000\n 398,718\n 400,000 346,650\n 330,934\n 275,981 269,139\n 300,000 239,503\n 235,797\n 193,564\n 200,000 137,179 153,839\n 105,609\n 100,000 49,798 64,312\n 35,200 42,702 38,227\n\n 0\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Report 5000-2.\n\nFigure 16. Liens Filed by the CFf and ACS. After rising steadily since FY 1999, the total\nnumber of liens filed in FY 2004 decreased by 2 percent due to a 5 percent decrease in liens filed\nby the CFf.\n CFf ACS\n\n 800,000\n\n\n 700,000\n\n 261,027\n 600,000\n\n\n 500,000\n 176,926 256,595\n 253,053\n 400,000\n 245,734\n 99,402 211,367\n 300,000\n 489,198\n 23,180 141,202\n 200,000\n 366,687\n 283,353 291,263 277,797\n 214,799 236,775\n 100,000\n 144,687 146,315\n\n 0\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Report 5000-23 and the Automated Lien System.\n\n\n\n Page 28\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 17. Levies Issued by the CFf and ACS. The overall trend is that an increasing number\nof levies have been issued by the ACS and the CFf since FY 2000.\n CFf ACS\n 4,000,000\n\n 3,500,000 2,968,489\n\n\n 3,000,000 2,409,891\n\n\n 2,500,000\n 2,029,928\n\n 2,000,000\n 1,861,467\n\n 1,500,000 1,538,094\n\n 1,140,487\n 1,000,000 533,405\n 397,656\n 144,881\n 500,000 690,928\n 699,035 473,481 106,747 74,897 140,675 143,255 142,750 168,146\n 0\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Report 5000-23 and Customer Service Activity Report.\n\nFigure 18. Number of Seizures Made Each Fiscal Year. The number of seizures made in\nFY 2004 continued the upward trend since FY 2000 but is still only about 4 percent of the\nseizures made in FY 1996.\n 12,000\n 10,449\n 10,090\n 10,000\n\n\n 8,000\n\n\n 6,000\n\n\n 4,000\n 2,307\n 2,000\n\n 161 234 296 399 440\n 74\n 0\n FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04\n\n Source: Collection Report 5000-23 and IRS Manual Reconciliation of Seizure Logs.\n\n\n\n\n Page 29\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 19. Examination Coverage of All Tax Returns \xe2\x80\x93 Percentage Change From FY 1996.\nWhile the examination coverage of tax returns is still below the level in FY 1999, the growth in\nexamination coverage again outpaced the growth in returns filed during FY 2004.\n Returns Filed Returns Examined\n\n 20%\n\n 10%\n\n 0%\n\n -10%\n\n -20%\n\n -30%\n\n -40%\n\n -50%\n\n -60%\n\n -70%\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n Source: TIGTA Analysis of IRS Data Book Information.\n\nFigure 20. Revenue Agent Results on U.S. Individual Income Tax Returns (Forms 1040),\nExcluding Training Returns \xe2\x80\x93 Percentage Change From FY 1996. The hours per return\nincreased and dollars per return decreased during FY 2004, resulting in a combined effect of\ndecreased dollars per hour during FY 2004.\n Hours Per Return Dollars Per Hour Dollars Per Return\n 200%\n\n\n\n 150%\n\n\n\n 100%\n\n\n\n 50%\n\n\n\n 0%\n\n\n\n -50%\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: TIGTA Analysis of Examination Table 37.\n\n\n\n\n Page 30\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 21. Revenue Agent Results on Corporate Income Tax Returns, Excluding Training\nReturns \xe2\x80\x93 Percentage Change From FY 1996. The hours per return and dollars per return\nincreased during FY 2004. The combined effect is that dollars per hour also increased during\nFY 2004.\n Hours Per Return Dollars Per Hour Dollars Per Return\n\n 300%\n\n\n 250%\n\n\n 200%\n\n\n 150%\n\n\n 100%\n\n\n 50%\n\n\n 0%\n\n\n -50%\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: TIGTA Analysis of Examination Table 37.\n\nFigure 22. Revenue Agent Results on Other Types of Tax Returns, Excluding Training\nReturns \xe2\x80\x93 Percentage Change From FY 1996. The hours per return and dollars per return\nincreased during FY 2004. The combined effect is that dollars per hour also increased during\nFY 2004.\n Hours Per Return Dollars Per Hour Dollars Per Return\n 250%\n\n\n\n 200%\n\n\n\n 150%\n\n\n\n 100%\n\n\n\n 50%\n\n\n\n 0%\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: TIGTA Analysis of Examination Table 37.\n\n\n Page 31\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 23. Tax Compliance Officer Results on Forms 1040, Excluding Training Returns \xe2\x80\x93\nPercentage Change From FY 1996. The hours per return increased and dollars per return\ndecreased during FY 2004. The combined effect is that dollars per hour decreased during\nFY 2004.\n Hours Per Return Dollars Per Hour Dollars Per Return\n\n 200%\n\n\n\n 150%\n\n\n\n 100%\n\n\n\n 50%\n\n\n\n 0%\n\n\n\n -50%\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: TIGTA Analysis of Examination Table 37.\n\nFigure 24. Number of Forms 1040 Examined Face-to-Face or Through Correspondence.\nThe total number of face-to-face examinations of individuals decreased by 3 percent and those\nconducted through correspondence increased by 24 percent in FY 2004. However, greater\nemphasis is being placed on examinations of individuals with income of $100,000 and over, and\nthose increased by 6 percent for face-to-face and by 67 percent for correspondence.\n Individuals Under $100,000; Face-to-face\n Individuals Under $100,000; Correspondence\n Individuals $100,000 and over; Face-to-face\n Individuals $100,000 and over; Correspondence\n 1,400,000\n\n 1,200,000\n\n 1,000,000\n\n 800,000\n\n 600,000\n\n 400,000\n\n 200,000\n\n 0\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: TIGTA Analysis of Examination Table 37.\n\n Page 32\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 25. Percentage of Forms 1040 Examined Face-to-Face or Through Correspondence.\nDuring FY 2004, the coverage rate for face-to-face examinations of non-business individual\nincome tax returns went down for all types of forms and income categories. Business individual\nincome tax returns had higher coverage for all income categories, but especially for those with\nincome of $100,000 and over. The coverage rate for correspondence examinations of individual\nincome tax returns went up for all categories except for the simple Form 1040A.\n 2.50%\n Face to Face -\n Income Under\n 2.00% $100,000\n\n Face to Face -\n 1.50% Income $100,000\n & Over\n\n Correspondence -\n 1.00% Income Under\n $100,000\n\n 0.50% Correspondence -\n Income $100,000\n & Over\n 0.00%\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: TIGTA Analysis of Examination Table 37.\n\nFigure 26. Number of Forms 1040 Examined by Compliance Center Correspondence.\nDuring FY 2004, the number of examinations that Compliance Centers conducted by\ncorrespondence increased for all categories of tax returns. The fluctuation for examinations of\nnon-business tax returns with income under $25,000 was largely based on the number of Earned\nIncome Tax Credit examinations.\n 809,604\n 600,000\n\n All Non-Business\n 500,000 < $25,000\n\n\n 400,000 All Non-Business\n $25,000 or More\n 300,000\n\n All Business\n 200,000 <$25,000\n\n\n 100,000 All Business\n $25,000 or More\n\n 0\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: TIGTA Analysis of IRS Data Book Information.\n\n\n\n Page 33\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 27. Number of Forms 1040 Examined by Field Offices. During FY 2004, the number\nof examinations conducted by field offices decreased for tax returns with non-business income\nand increased for tax returns with business income. Examinations of business tax returns with\nincome $100,000 and over increased by 27 percent during FY 2004.\n 275,000\n All Non-Business\n 250,000 < $25,000\n\n 225,000\n All Non-Business\n 200,000 $25,000 -\n $99,999\n 175,000 All Non-Business\n $100,000 & Over\n 150,000\n\n 125,000 All Business\n <$25,000\n 100,000\n\n 75,000 All Business\n $25,000 -\n 50,000 $99,999\n All Business\n 25,000 $100,000 & Over\n 0\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: TIGTA Analysis of IRS Data Book Information.\n\nFigure 28. Percentage of Forms 1040 Examined. This shows the comparison in examination\nrates (total correspondence and face-to-face) for tax returns with business or farm income and\nthose under $100,000 and $100,000 and over without any business or farm income. The\npercentage examined for all of the categories increased during FY 2004.\n 4.0%\n 1040 Non-\n 3.5% business or\n Farm $100,000\n 3.0%\n & Over\n 1040 Non-\n 2.5% business or\n Farm Under\n 2.0% $100,000\n 1040 with\n 1.5% Schedule C\n Business\n 1.0% Income\n 1040 with\n 0.5% Schedule F\n Farm Income\n 0.0%\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n Source: TIGTA Analysis of IRS Data Book Information.\n\n\n\n\n Page 34\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 29. Percentage Examined \xe2\x80\x93 Forms 1040 With No Business or Farm Income. The\npercentage of Forms 1040 examined increased during FY 2004 for all categories except\nForms 1040A. Most of the increases were due to large increases in the number of examinations\nconducted by Compliance Center employees.\n 3.0% 1040A\n Under\n $25,000\n 2.5%\n\n 1040\n Under\n 2.0%\n $25,000\n\n 1.5%\n 1040\n $25,000-\n 49,999\n 1.0%\n 1040\n $50,000-\n 0.5% 99,999\n\n 1040\n 0.0% $100,000\n & Over\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n Source: TIGTA Analysis of IRS Data Book Information.\n\nFigure 30. Examination Coverage of Non-business Forms 1040 \xe2\x80\x93 Under $100,000. The\nnumber of non-business tax returns filed with income under $100,000 dropped off slightly in\nFY 2004 after steadily increasing since FY 1996. During FY 2004 the examination coverage\nrate for these returns increased by 14 percent due to a large increase in the number of\nexaminations conducted by Compliance Center employees.\n Returns Filed Returns Examined\n 112 1,800\n\n 1,600\n\n\n\n\n Returns Examined (in Thousands)\n 110\n Returns Filed (in Millions)\n\n\n\n\n 1,400\n 108\n 1,200\n 106 1,000\n\n 104 800\n\n 600\n 102\n 400\n 100\n 200\n\n 98 0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n Source: TIGTA Analysis of IRS Data Book Information.\n\n\n\n Page 35\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 31. Examination Coverage of Non-business Forms 1040 \xe2\x80\x93 $100,000 and Over. The\nnumber of non-business tax returns filed with income $100,000 and over has been relatively\nconstant since FY 2002. During FY 2004 the examination coverage rate for these returns\nincreased by 43 percent due to a large increase in the number of examinations conducted by\nCompliance Center employees.\n Returns Filed Returns Examined\n 12 240\n\n\n\n\n Returns Examined (in Thousands)\n 10\n Returns Filed (in Millions)\n\n\n\n\n 190\n\n 8\n 140\n 6\n 90\n 4\n\n 40\n 2\n\n\n 0 -10\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n Source: TIGTA Analysis of IRS Data Book Information.\n\nFigure 32. Examination Coverage of Forms 1040 With Business Income (Excluding\nFarms). During FY 2004, the total number of individual income tax returns filed with business\nincome increased as did the percent examined in each of the categories. These examination\ncoverage increases were largely due to increases in the number of examinations conducted by\nfield examination employees, especially those tax returns showing higher incomes.\n 5% 9,000\n\n TGR\n $100,000\n 4% 8,500\n Returns Filed (in Thousands)\n\n\n\n\n & Over\n Percent Examined\n\n\n\n\n TGR\n 3% 8,000 $25,000-\n $99,999\n\n 2% 7,500 TGR\n Under\n $25,000\n 1% 7,000\n Sch C\n Returns\n Filed\n 0% 6,500\n 96\n\n\n\n 97\n\n\n\n 98\n\n\n\n 99\n\n\n\n 00\n\n\n\n 01\n\n\n\n 02\n\n\n\n 03\n\n\n\n 04\n 19\n\n\n\n 19\n\n\n\n 19\n\n\n\n 19\n\n\n\n 20\n\n\n\n 20\n\n\n\n 20\n\n\n\n 20\n\n\n\n 20\n\n\n\n\nSource: TIGTA Analysis of IRS Data Book Information. TGR = Total Gross Receipts.\n\n\n Page 36\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 33. Examination Coverage of Forms 1040 With Farm Income. The number of\nForms 1040 filed with farm income continued to decrease in FY 2004. There was an increase in\nexamination coverage due to increases in the number of Revenue Agent examinations of these\ntax returns.\n Returns Filed Returns Examined\n 900 20\n\n 800 18\n Returns Filed (in Thousands)\n\n\n\n\n Returns Examined (in Thousands)\n 700 16\n 14\n 600\n 12\n 500\n 10\n 400\n 8\n 300\n 6\n 200 4\n 100 2\n 0 0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n Source: TIGTA Analysis of IRS Data Book Information.\n\nFigure 34. Examination Coverage of All Corporate Income Tax Returns \xe2\x80\x93 Percentage\nChange From FY 1996. The number of corporate tax returns filed continued the steady\nincrease during FY 2004. The number of returns examined decreased for all corporate tax return\ncategories except for those filed with assets of $10 million and over. Overall, 1 in 182 corporate\ntax returns was examined in FY 2003; this decreased to 1 in 245 in FY 2004.\n Returns Filed Returns Examined\n 40%\n\n 20%\n\n 0%\n\n -20%\n\n -40%\n\n -60%\n\n -80%\n\n -100%\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n Source: TIGTA Analysis of IRS Data Book Information.\n\n\n\n Page 37\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 35. Percentage of Corporate Income Tax Returns Examined \xe2\x80\x93 Corporations With\nAssets Under $10 Million. During FY 2004, the percentage of corporate tax returns with no\nbalance sheet or assets under $10 million that were examined decreased.\n 18%\n Assets\n $5M -\n 16% $9.9M\n 14% Assets\n $1M -\n 12% $4.9M\n\n 10% Assets\n $250,000 -\n 8% $0.9M\n\n Assets\n 6%\n Under\n $250,000\n 4%\n No\n 2% Balance\n Sheet\n 0%\n 96\n\n\n\n 97\n\n\n\n 98\n\n\n\n 99\n\n\n\n 00\n\n\n\n 01\n\n\n\n 02\n\n\n\n 03\n\n\n\n 04\n 19\n\n\n\n 19\n\n\n\n 19\n\n\n\n 19\n\n\n\n 20\n\n\n\n 20\n\n\n\n 20\n\n\n\n 20\n\n\n\n 20\nSource: TIGTA Analysis of IRS Data Book Information.\n\n\nFigure 36. Percentage of Corporate Income Tax Returns Examined \xe2\x80\x93 Corporations With\nAssets $10 Million and Over. During FY 2004, the percentage of corporate tax returns\nexamined in the asset classes $10 million and over increased between 3 and 10 percent.\n 60%\n Assets\n $250M &\n 50% Over\n\n\n 40% Assets\n $100M -\n $249.9M\n 30%\n Assets\n $50M -\n 20%\n $99.9M\n\n\n 10% Assets\n $10M -\n $49.9M\n 0%\n 96\n\n\n\n 97\n\n\n\n 98\n\n\n\n 99\n\n\n\n 00\n\n\n\n 01\n\n\n\n 02\n\n\n\n 03\n\n\n\n 04\n 19\n\n\n\n 19\n\n\n\n 19\n\n\n\n 19\n\n\n\n 20\n\n\n\n 20\n\n\n\n 20\n\n\n\n 20\n\n\n\n 20\n\n\n\n\nSource: TIGTA Analysis of IRS Data Book Information.\n\n\n\n\n Page 38\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 37. Examination Coverage of Corporations With Assets Under $10 Million. The\nnumber of corporate tax returns filed with assets under $10 million dropped less than 1 percent\nduring FY 2004, but the number of tax returns examined decreased by 46 percent.\n Returns Filed Returns Examined\n 2,600 100\n\n\n\n\n Returns Examined (in Thousands)\n 2,550 90\n Returns Filed (in Thousands)\n\n\n\n\n 2,500 80\n 70\n 2,450\n 60\n 2,400\n 50\n 2,350\n 40\n 2,300\n 30\n 2,250 20\n 2,200 10\n 2,150 0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n Source: TIGTA Analysis of IRS Data Book Information.\n\nFigure 38. Examination Coverage of Corporations With Assets $10 Million and Over.\nDuring FY 2004, the number of corporate tax returns filed with assets $10 million and over\ndecreased 4 percent while the number of returns examined increased 34 percent.\n Returns Filed Returns Examined\n 62 16\n\n 60\n\n\n\n\n Returns Examined (in Thousands)\n Returns Filed (in Thousands)\n\n\n\n\n 14\n 58\n\n 56 12\n 54\n\n 52 10\n\n 50\n 8\n 48\n\n 46 6\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n Source: TIGTA Analysis of IRS Data Book Information.\n\n\n\n\n Page 39\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 39. Examination Coverage of U.S. Income Tax Return for an S Corporation\n(Forms 1120S). The upward trend in the number of Forms 1120S filed continued in FY 2004,\nwith a 6 percent increase from FY 2003. During the same time period, the number of\nexaminations decreased by 34 percent.\n Returns Filed Returns Examined\n 4,000 35\n\n\n\n\n Returns Examined (in Thousands)\n 3,500 30\n Returns Filed (in Thousands)\n\n\n\n\n 3,000\n 25\n 2,500\n 20\n 2,000\n 15\n 1,500\n 10\n 1,000\n\n 500 5\n\n 0 0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n Source: TIGTA Analysis of IRS Data Book Information.\n\nFigure 40. Examination Coverage of Partnership Income Tax Returns. The number of\npartnership tax returns filed continued to increase at the rate of about 100,000 per year since\nFY 1996 to 2.4 million in FY 2004. During FY 2004, the number of returns examined decreased\n21 percent, only 1 out of every 386 partnership returns is examined.\n Returns Filed Returns Examined\n 3,000 25\n\n\n\n\n Returns Examined (in Thousands)\n 2,500\n Returns Filed (in Thousands)\n\n\n\n\n 20\n\n 2,000\n 15\n\n 1,500\n\n 10\n 1,000\n\n 5\n 500\n\n\n 0 0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n Source: TIGTA Analysis of IRS Data Book Information.\n\n\n\n Page 40\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 41. Examination Coverage of Fiduciary Income Tax Returns. During FY 2004, the\nnumber of income tax returns filed by estates and trusts increased slightly, but the number of tax\nreturns examined decreased by 27 percent. As a result, only 1 out of every 835 fiduciary income\ntax returns is examined.\n Returns Filed Returns Examined\n 4,500 8\n 4,000 7\n\n\n\n\n Returns Examined (in Thousands)\n Returns Filed (in Thousands)\n\n\n\n\n 3,500 6\n 3,000\n 5\n 2,500\n 4\n 2,000\n 3\n 1,500\n 1,000 2\n\n 500 1\n\n 0 0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n Source: TIGTA Analysis of IRS Data Book Information.\n\nFigure 42. Examination Coverage of Employment Tax Returns. During FY 2004, the\nnumber of employment tax returns filed increased by 2 percent and the number of tax returns\nexamined increased by 8 percent. However, examination coverage is only 0.06 percent.\n Returns Filed Returns Examined\n 70.0 70\n\n\n\n\n Returns Examined ( in Thousands)\n 60.0 60\n Returns Filed (in Millions)\n\n\n\n\n 50.0 50\n\n 40.0 40\n\n 30.0 30\n\n 20.0 20\n\n 10.0 10\n\n 0.0 0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n Source: TIGTA Analysis of IRS Data Book Information.\n\n\n\n\n Page 41\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 43. Examination Coverage of Excise Tax Returns. The number of excise tax returns\nfiled remained relatively steady, but the number of returns examined increased by 43 percent\nduring FY 2004.\n Returns Filed Returns Examined\n 900 40\n\n\n\n\n Returns Examined (in Thousands)\n Returns Filed (in Thousands)\n\n\n\n\n 800 30\n\n\n\n 700 20\n\n\n\n 600 10\n\n\n\n 500 0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n Source: TIGTA Analysis of IRS Data Book Information.\n\nFigure 44. Examination Coverage of Estate Tax Returns. During FY 2004, the number of\nestate tax returns filed decreased by 24 percent and the number of returns examined decreased by\n11 percent. As a result, the percentage of Estate Tax Returns examined increased by 1 percent.\n Returns Filed Returns Examined\n 140 14\n\n\n\n\n Returns Examined (in Thousands)\n Returns Filed (in Thousands)\n\n\n\n\n 120 12\n\n 100 10\n\n 80 8\n\n 60 6\n\n 40 4\n\n 20 2\n\n 0 0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n Source: TIGTA Analysis of IRS Data Book Information.\n\n\n\n\n Page 42\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 45. Examination Coverage of Gift Tax Returns. In FY 2004, the number of gift tax\nreturns filed increased slightly, but the number of returns examined increased by 7 percent.\n Returns Filed Returns Examined\n 350 3.5\n\n\n\n\n Returns Examined (in Thousands)\n 300 3.0\n Returns Filed (in Thousands)\n\n\n\n\n 250 2.5\n\n 200 2.0\n\n 150 1.5\n\n 100 1.0\n\n 50 0.5\n\n 0 0.0\n 96\n\n\n\n\n 97\n\n\n\n\n 98\n\n\n\n\n 99\n\n\n\n\n 00\n\n\n\n\n 01\n\n\n\n\n 02\n\n\n\n\n 03\n\n\n\n\n 04\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 19\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n\n\n\n\n 20\n Source: TIGTA Analysis of IRS Data Book Information.\n\nFigure 46. Other Compliance Contacts on Forms 1040. The number of contacts increased\nfor all types of other compliance contacts during FY 2004. The spike in Math Error cases for\nFY 2002 was the result of taxpayer confusion over the Rate Reduction Credit. Over half of the\nMath Error cases during FY 2004 were due to child tax credit issues.\n 14,000,000\n\n\n\n 12,000,000\n\n\n\n 10,000,000\n\n\n\n 8,000,000\n\n\n\n 6,000,000\n\n\n\n 4,000,000\n\n\n\n 2,000,000\n\n\n\n 0\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n Math Error 4,750,771 5,983,944 5,668,906 6,552,290 5,751,462 6,082,967 13,315,765 4,024,981 7,342,484\n Underreporter 1,930,326 931,354 1,726,098 1,770,695 1,353,545 1,161,901 1,491,139 1,561,068 1,948,363\n ASFR 719,913 392,598 426,495 584,142 332,427 333,770 242,637 466,816 1,585,259\n\n Source: TIGTA Analysis of \xe2\x80\x9cReport to Congress: IRS Tax Compliance Activities\xe2\x80\x9d (dated July 15, 2003) and IRS\n Data Book Information for data after FY 2002.\n\n Page 43\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 47. Other Compliance Contacts \xe2\x80\x93 Percentage of Coverage on Forms 1040. The\nlevels of coverage increased for all three types of other compliance contacts for FY 2004. The\nMath Error aberration in FY 2002 was explained in Figure 46.\n Math Error Underreporter ASFR\n 14.0%\n\n 0.2%\n 12.0%\n 1.2%\n 10.0%\n\n\n 8.0% 1.2%\n 0.5%\n 0.6% 0.3% 0.4% 0.3% 0.3% 1.5%\n 6.0% 1.4%\n 0.8% 1.4% 0.9% 10.2%\n 1.7% 1.1% 0.4%\n 4.0% 1.2%\n 5.2% 5.6%\n 5.0% 4.6% 4.5% 4.7%\n 2.0% 4.0%\n 3.1%\n\n 0.0%\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\n Source: TIGTA Analysis of \xe2\x80\x9cReport to Congress: IRS Tax Compliance Activities\xe2\x80\x9d (dated July 15, 2003) and IRS\n Data Book Information for data after FY 2002.\n\nFigure 48. Numbers and Percentages of Other Compliance Contacts on Forms 1040. This\nchart shows the actual numbers and percentages of other compliance contacts on individual types\nof tax returns. The FY 2002 Math Error aberration was explained in Figure 46 comments.\n FY FY FY FY FY FY FY FY FY\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\nMath Error 4,750,771 5,983,944 5,668,906 6,552,290 5,751,462 6,082,967 13,315,765 4,024,981 7,342,484\n Coverage Rate 4.01% 4.97% 4.63% 5.25% 4.53% 4.70% 10.22% 3.08% 5.59%\n\nUnderreporter 1,930,326 931,354 1,726,098 1,770,695 1,353,545 1,161,901 1,491,139 1,561,068 1,948,363\n Coverage Rate 1.66% 0.79% 1.43% 1.44% 1.08% 0.91% 1.15% 1.20% 1.49%\n\nASFR 719,913 392,598 426,495 584,142 332,427 333,770 242,637 466,816 1,585,259\n Coverage Rate 0.62% 0.33% 0.35% 0.48% 0.27% 0.26% 0.19% 0.36% 1.21%\nSource: TIGTA Analysis of \xe2\x80\x9cReport to Congress: IRS Tax Compliance Activities\xe2\x80\x9d (dated July 15, 2003) and IRS\nData Book Information for data after FY 2002.\n\n\n\n\n Page 44\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 49. Numbers and Percentages of Examinations on Forms 1040. This chart shows the\nactual numbers and percentages of examination coverage for these individual types of tax\nreturns.\n FY FY FY FY FY FY FY FY FY\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\nForms 1040A <$25,000\n Returns Examined 921,820 659,094 515,015 600,949 256,650 357,954 289,136 182,222 168,887\n Coverage Rate 2.00% 1.44% 1.14% 1.36% 0.60% 0.86% 0.71% 0.51% 0.50%\n\nForms 1040 - Non-Business\n Returns Examined <\n $25,000 155,125 157,978 104,050 76,215 51,567 55,624 90,781 197,005 245,470\n Coverage Rate 1.17% 1.21% 0.81% 0.58% 0.37% 0.40% 0.64% 1.09% 1.26%\n Returns Examined $25,000\n & < $50,000 259,794 196,489 165,168 103,340 63,742 67,109 71,966 94,825 135,041\n Coverage Rate 0.95% 0.70% 0.58% 0.36% 0.21% 0.22% 0.23% 0.30% 0.43%\n Returns Examined $50,000\n & < $100,000 196,582 140,330 121,384 77,698 51,954 53,433 69,620 105,400 113,944\n Coverage Rate 1.16% 0.77% 0.62% 0.37% 0.23% 0.23% 0.28% 0.41% 0.44%\n Returns Examined\n $100,000 and over 129,320 119,575 100,079 80,038 68,616 64,259 80,483 106,565 151,969\n Coverage Rate 2.85% 2.27% 1.66% 1.14% 0.84% 0.69% 0.75% 0.98% 1.39%\n\nForms 1040 - Schedule C\n Returns Examined\n < $25,000 102,558 78,553 60,023 68,450 61,695 69,332 67,876 81,541 92,855\n Coverage Rate 4.21% 3.19% 2.37% 2.69% 2.43% 2.72% 2.67% 3.00% 3.15%\n Returns Examined\n $25,000 & < $100,000 87,691 80,861 58,877 42,391 31,226 34,650 40,530 46,927 53,477\n Coverage Rate 2.85% 2.57% 1.82% 1.30% 0.93% 1.02% 1.18% 1.33% 1.47%\n Returns Examined\n $100,000 and over 71,050 73,049 59,728 44,945 28,781 24,080 29,848 30,738 39,124\n Coverage Rate 4.09% 4.13% 3.25% 2.40% 1.48% 1.20% 1.45% 1.47% 1.86%\n\nForms 1040 - Schedule F\n Returns Examined\n < $100,000 7,944 5,868 3,949 2,832 1,384 2,104 1,709 1,997 3,104\n Coverage Rate 1.59% 1.28% 0.93% 0.68% 0.35% 0.55% 0.47% 0.57% 0.91%\n Returns Examined\n $100,000 and over 9,662 7,446 4,507 3,415 2,150 3,211 1,932 2,076 4,003\n Coverage Rate 3.61% 2.75% 1.63% 1.23% 0.80% 1.18% 0.72% 0.78% 1.61%\nSource: TIGTA Analysis of IRS Data Book Information.\n\n\n\n\n Page 45\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\nFigure 50. Numbers and Percentages of Examinations on Business Tax Returns. This chart\nshows the actual numbers and percentages of examination coverage for these non-individual\ntypes of tax returns.\n FY FY FY FY FY FY FY FY FY\n 1996 1997 1998 1999 2000 2001 2002 2003 2004\n\nCorporations < $10 Million 46,568 56,323 41,818 28,268 18,623 14,332 14,655 13,608 7,294\n\n Coverage Rate 1.88% 2.22% 1.67% 1.16% 0.77% 0.60% 0.63% 0.58% 0.32%\nCorporations $10 Million\nand Over 12,891 12,972 11,830 10,537 9,212 8,718 8,443 7,125 9,523\n\n Coverage Rate 25.33% 24.29% 21.43% 19.05% 16.30% 15.08% 14.17% 12.08% 16.74%\n\n1120S 19,490 23,898 25,522 21,169 15,200 12,437 11,646 9,695 6,402\n\n Coverage Rate 0.92% 1.04% 1.04% 0.81% 0.55% 0.43% 0.39% 0.30% 0.19%\n\nPartnerships 7,636 9,811 10,082 7,991 6,539 5,070 5,543 7,871 6,226\n\n Coverage Rate 0.49% 0.59% 0.58% 0.43% 0.33% 0.25% 0.26% 0.35% 0.26%\n\nFiduciaries 4,701 5,753 6,890 6,382 7,318 7,070 7,206 6,068 4,438\n\n Coverage Rate 0.15% 0.18% 0.21% 0.19% 0.22% 0.20% 0.18% 0.17% 0.12%\n\nEmployment 56,195 60,799 40,595 28,898 20,074 17,163 17,252 16,408 17,698\n\n Coverage Rate 0.20% 0.21% 0.14% 0.10% 0.07% 0.06% 0.06% 0.06% 0.06%\n\nExcise 32,900 24,701 19,858 12,562 10,294 8,169 8,426 8,756 12,560\n\n Coverage Rate 4.17% 3.14% 2.48% 1.53% 1.25% 0.96% 1.03% 1.05% 1.49%\n\nEstates 11,794 11,686 10,451 9,319 8,024 7,707 7,151 7,265 6,455\n\n Coverage Rate 14.47% 12.90% 10.22% 8.46% 6.89% 6.24% 5.84% 6.38% 7.41%\n\nGift 1,934 2,085 2,010 2,369 2,097 2,005 1,899 1,855 1,979\n\n Coverage Rate 0.89% 0.90% 0.79% 0.91% 0.72% 0.65% 0.63% 0.66% 0.69%\nSource: TIGTA Analysis of IRS Data Book Information.\n\n\n\n\n Page 46\n\x0c Trends in Compliance Activities Through Fiscal Year 2004\n\n Appendix VI\n\n\n Related Treasury Inspector General for Tax Administration\n Audit Reports\n\nPrior Compliance Trends Reports:\n \xc2\xbe Management Advisory Report: Evaluation of Reduction in the Internal Revenue\n Service\xe2\x80\x99s Compliance Activities (Reference Number 2000-30-075, dated May 2000).\n \xc2\xbe Management Advisory Report: Tax Return Filing and Examination Statistics (Reference\n Number 2001-30-175, dated September 2001).\n \xc2\xbe Management Advisory Report: Analysis of Trends in Compliance Activities Through\n Fiscal Year 2001 (Reference Number 2002-30-184, dated September 2002).\n \xc2\xbe Trends in Compliance Activities Through Fiscal Year 2002 (Reference\n Number 2003-30-078, dated March 2003).\n \xc2\xbe Trends in Compliance Activities Through Fiscal Year 2003 (Reference\n Number 2004-30-083, dated April 2004).\nCollection Reengineering Reports:\n \xc2\xbe The New Risk-Based Collection Initiative Has the Potential to Increase Revenue and\n Improve Future Collection Design Enhancements (Reference Number 2004-30-165,\n dated September 2004).\n \xc2\xbe The Revised Collection Case Selection Criteria That Expedites Trust Fund Workload to\n the Field Appears Effective (Reference Number 2004-30-173, dated September 2004).\n \xc2\xbe Implementation of the Collection Field Function Consultation Initiative Was Carefully\n Coordinated, but Some Aspects Could Be Enhanced (Reference Number 2005-30-011,\n dated November 2004).\nExamination Reengineering Reports:\n \xc2\xbe The Office Audit Redesign Pilot Was Effective in Meeting Its Goals, but Its\n Implementation Needs to Be Monitored (Reference Number 2004-30-033, dated\n January 2004).\n \xc2\xbe Many Aspects of the Field Examination Reengineering Pilot Were Effectively\n Implemented; However, Continued Monitoring Is Needed During the Nationwide Rollout\n (Reference Number 2004-30-116, dated June 2004).\n \xc2\xbe The High Income Taxpayer Strategy Was Effectively Implemented, Although Its Success\n Still Needs to Be Determined (Reference Number 2005-30-012, dated November 2004).\n\n\n Page 47\n\x0c'


type: contracts

jurisdiction: EU

text:
 19.10.2006
 LV
 Eiropas Savienības Oficiālais Vēstnesis
 L 289/11
 EEZ APVIENOTĀS KOMITEJAS LĒMUMS
 Nr. 80/2006
 (2006. gada 7. jūlijs),
 ar ko groza EEZ līguma II pielikumu (Tehniskie noteikumi, standarti, testēšana un sertifikācija)
 EEZ APVIENOTĀ KOMITEJA,
 ņemot vērā Līgumu par Eiropas Ekonomikas zonu, kurā grozījumi izdarīti ar Protokolu, ar ko pielāgo Līgumu par Eiropas Ekonomikas zonu, turpmāk tekstā “Līgums”, un jo īpaši tā 98. pantu,
 tā kā:
 (1)
 Līguma II pielikums tika grozīts ar EEZ Apvienotās komitejas 2006. gada 10. marta Lēmumu Nr. 25/2006 (1).
 (2)
 Līgumā ir jāiekļauj Komisijas 2005. gada 23. novembra Regula (EK) Nr. 1911/2005, ar kuru attiecībā uz flugestona acetātu groza I pielikumu Padomes Regulai (EEK) Nr. 2377/90, ar ko nosaka Kopienas procedūru veterināro zāļu maksimāli pieļaujamo atlieku daudzumu noteikšanai dzīvnieku izcelsmes produktos (2),
 IR NOLĒMUSI ŠĀDI.
 1. pants
 Līguma II pielikuma XIII nodaļas 14. punktu (Padomes Regula (EEK) Nr. 2377/90) papildina ar šādu ievilkumu:
 “—
 32005 R 1911: Komisijas 2005. gada 23. novembra Regula (EK) Nr. 1911/2005 (OV L 305, 24.11.2005., 30. lpp.).”
 2. pants
 Regulas (EK) Nr. 1911/2005 teksti islandiešu un norvēģu valodā, kas jāpublicē Eiropas Savienības Oficiālā Vēstneša EEZ pielikumā, ir autentiski.
 3. pants
 Šis lēmums stājas spēkā 2006. gada 8. jūlijā ar nosacījumu, ka EEZ Apvienotajai komitejai ir iesniegti visi paziņojumi saskaņā ar Līguma 103. panta 1. punktu (3).
 4. pants
 Šo lēmumu publicē Eiropas Savienības Oficiālā Vēstneša EEZ iedaļā un EEZ pielikumā.
 Briselē, 2006. gada 7. jūlijā
 EEZ Apvienotās komitejas vārdā –
 priekšsēdētāja
 Oda Helen SLETNES
 (1) OV L 147, 1.6.2006., 37. lpp.
 (2) OV L 305., 24.11.2005, 30. lpp.
 (3) Konstitucionālās prasības nav norādītas.