GAO reviewed the Internal Revenue Service's (IRS) tax compliance research program, focusing on: (1) the success IRS has had with its new research approach; and (2) IRS ability to implement lessons learned from its Compliance 2000 initiative.

GAO found that: (1) IRS implemented its new compliance research approach to address concerns over taxpayer noncompliance and the large gap between income taxes owed and taxes paid; (2) IRS attempted to address these concerns through Compliance 2000, but had limited success due to inadequate compliance data; (3) IRS could avoid these mistakes by establishing more support for its research, using objective compliance data, acquiring more specialized staff, developing an organizational infrastructure, and setting objective measurements; (4) IRS officials believe that this new research approach is more cost-effective, but they doubt that they will reach 90-percent compliance by 2001; (5) IRS officials are concerned that district offices will spend 85 percent of their resources on national compliance issues rather than on district-level issues; (6) IRS has made some progress in developing the Compliance Research Information System (CRIS), but it is unsure when it will become available; (7) IRS officials believe that more training is needed in specialized areas to achieve research objectives; and (8) IRS is in the process of developing tools that track and measure the success of its research projects.

Click here for the full GAO Report, PDF Version, 70pgs. 866K