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The Changing Face of Tax Enforcement, 1978-1988

Dubin, Jeffrey A. and Graetz, Michael A. and Wilde, Louis L. (1990) The Changing Face of Tax Enforcement, 1978-1988. The Tax Lawyer, 43 (4). pp. 893-914. ISSN 0040-005X.

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Published reports of the so-called “tax-gap,” the amount of underreported federal income taxes, now estimated to have been $83- $94 billion in 1987, and of taxes due but uncollected, now estimated to have been $61-$72 billion in 1987, have raised questions about the administration of the federal tax system. In some quarters, these reports have simply led to calls for more funding for the Service. We, however, regard the current public focus on the Service as creating an opportunity for serious discussion of tax administration, a subject long ignored in both scholarly and professional literature. We propose here to examine three aspects of tax administration that are widely thought to play a particularly critical role in tax enforcement: the examination (or audit) function, information reporting, and the criminal enforcement process. A major shift in tax enforcement policy has occurred during the last decade. Greater reliance has been placed on information reporting; on the other hand, fewer people have been audited or criminally prosecuted for tax violations, but those who have been so treated have been punished more severely. These shifts in enforcement policy raise important questions of both the efficacy and the fairness of the tax administrative process. Before detailing our findings regarding these aspects of enforcement policy, however, we shall provide a brief overview of the Service's budgets during the past decade. We shall then turn to a more detailed examination of the Service's audit and criminal investigation functions, including, a presentation of data concerning penalties. Since we have a substantial amount of information to present, we have accepted the old saw about saving many words through pictures, and generally have tried to summarize our data in graphs. Finally, we offer some conclusions and suggestions for further research.

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Additional Information:© 1990 American Bar Association. Professor Graetz thanks the National Science Foundation for research support (grant no. SES-870443) as do Professors Dubin and Wilde (grant no. SES-8701027). All authors thank Theodore Seto for helpful comments and Jerry Hauck, Seth Hendon and Michael Udell for research assistance. Professor Graetz is currently serving as Deputy Assistant Secretary (Tax Policy) of the Treasury. This article was written before Professor Graetz assumed that office and does not necessarily reflect the views of the Treasury Department.
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Subject Keywords:Taxes, Tax audits, Business audits, Criminals, Corporations, Criminal prosecution, Criminal investigation, Tax attorneys, Taxation, Taxpaying
Issue or Number:4
Record Number:CaltechAUTHORS:20170912-151949764
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Official Citation:Dubin, Jeffrey A., et al. “THE CHANGING FACE OF TAX ENFORCEMENT, 1978-1988.” The Tax Lawyer, vol. 43, no. 4, 1990, pp. 893–914. JSTOR, JSTOR,
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81386
Deposited By: Tony Diaz
Deposited On:15 Sep 2017 18:33
Last Modified:03 Oct 2019 18:42

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