THE COMPLIANCE COSTS OF IRS POST-FILING PROCESSES

Better measuring the costs of tax administration will allow for a better understanding of factors influenc-ing the federal tax system and its outputs. As discussed in Slemrod and Yitzhaki (2002), the public’s cost of providing information is the largest component of tax administration costs, considerably exceeding the direct budgetary costs of the Internal Revenue Service. The public’s compliance costs are typically re-lated to the filing of a tax return. However, there are instances where additional information is provided to the IRS after a tax return has been filed, at which point additional costs are incurred. Because it is imprac-tical to measure these costs directly, they must be estimated. This work addresses the estimation of these post-filing compliance costs.