Staffing cuts directly impact tax compliance
In the first paper, Vishal Baloria, an accounting faculty member at the University of Connecticut, examined how IRS staffing reductions affect individual income tax compliance. The research used the approximately 11% workforce reduction that followed a December 2010 hiring freeze as its primary event.
To measure the impact, the study compared tax filing data from states that impose an individual income tax with data from states that do not. The hypothesis was that taxpayers in income-tax states are more affected by a reduction in IRS resources, both because they face a higher incentive for non-compliance and a greater compliance burden from filing two returns.
To dig deeper, visit the original article on the Thomson Reuters blog.