Biennial Taxes – A Simple Solution to Rising Tax Non-Compliance, Shrinking IRS Budgets, and Increasing Taxpayer Burden

27 Pages Posted: 12 Sep 2020 Last revised: 29 Sep 2020

See all articles by Jeffrey A Dubin

Jeffrey A Dubin

University of Southern California, Department of Economics

Emma Cockerell

University of Southern California, Department of Economics

Date Written: September 9, 2020

Abstract

Each year, individual tax non-compliance causes billions of dollars of lost tax revenue. While the Internal Revenue Service (IRS) conducts examinations of select returns, the audit rate fell precipitously in past decades. Meanwhile, the number of individual returns grew and return complexity rose. Individuals face a dauntingly complex tax code that requires the assistance of paid preparers. More than ever, the IRS experiences greater demands for assistance from taxpayers but fewer resources to fulfill these demands. Instead of the oft-proposed IRS budget increase, we propose a simple and pragmatic, but transformative, solution: biennial filing and collection of taxes, which would minimize taxpayer and paperwork burdens, free up IRS funding, and result in a de facto doubling of the audit rate. In aggregate, the plan is estimated to save $74 – $83 billion for the IRS and the American public.

Keywords: tax gap, audit rates, tax compliance, compliance costs

JEL Classification: H24, H26, H71, H83, K34

Suggested Citation

Dubin, Jeffrey A and Cockerell, Emma, Biennial Taxes – A Simple Solution to Rising Tax Non-Compliance, Shrinking IRS Budgets, and Increasing Taxpayer Burden (September 9, 2020). Available at SSRN: https://ssrn.com/abstract=3689246 or http://dx.doi.org/10.2139/ssrn.3689246

Jeffrey A Dubin (Contact Author)

University of Southern California, Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

Emma Cockerell

University of Southern California, Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
37
Abstract Views
322
PlumX Metrics