Hostname: page-component-78c5997874-dh8gc Total loading time: 0 Render date: 2024-11-08T02:20:35.287Z Has data issue: false hasContentIssue false
  • English
  • Français

The political economy of tax enforcement: a look at the Internal Revenue Service from 1978 to 2010

Published online by Cambridge University Press:  28 September 2015

Sutirtha Bagchi
Sutirtha Bagchi*
Affiliation:
Department of Economics, Villanova University, USA E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This article looks at whether political ideology matters for enforcement of the nation’s tax laws. An analysis of the Internal Revenue Service (IRS) budget and personnel suggests that the party affiliation of the President makes no difference to the overall level of IRS resources. However, there are significant increases in the number of IRS employees devoted to criminal investigation and revenue collection under Democratic administrations. Audits of tax returns filed by corporations, individuals and estates are also significantly more likely under Democratic administrations. The body of evidence points in the direction that while Congress has a greater influence in determining the overall level of resources available to the IRS, the President has a more pronounced influence on the allocation of those resources.

Keywords

auditsIRStax compliancetax enforcement
Type
Research Article
Information
Journal of Public Policy , Volume 36 , Issue 3 , September 2016 , pp. 335 - 380
Copyright
© Cambridge University Press, 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alt, J. E. and Lowry, R. C. (1994) Divided Government, Fiscal Institutions, and Budget Deficits: Evidence from the States. American Political Science Review 88(4): 811–828.CrossRefGoogle Scholar
Associated Press (1995) Budget Restraint Indefinitely Postpones Random Audit Program, Associated Press, 24 October.Google Scholar
Bartlett, B. (2012) The Tax Gap, The New York Times Economix blog, 10 January.Google Scholar
Baumgartner, F. R. (2013) Ideas and Policy Change. Governance 26(2): 239–258.CrossRefGoogle Scholar
Canes-Wrone, B., Howell, W. G. and Lewis, D. E. (2008) Toward a Broader Understanding of Presidential Power: A Reevaluation of the Two Presidencies Thesis. The Journal of Politics 70(1): 1–16.Google Scholar
Carpenter, D. P. (1996) Adaptive Signal Processing, Hierarchy, and Budgetary Control in Federal Regulation. American Political Science Review 90(2): 283–302.Google Scholar
Cooper, P. J. (2002) By Order of the President: The Use and Abuse of Executive Direct Action. Lawrence, KS: University Press of Kansas.Google Scholar
Dubin, J. A. (2004) Criminal Investigation Enforcement Activities and Taxpayer Noncompliance. Washington, DC: Internal Revenue Service.Google Scholar
Griliches, Z. and Hausman, J. A. (1986) Errors in Variables in Panel Data. Journal of Econometrics 31(1): 93–118.Google Scholar
Hoopes, J. L., Mescall, D. and Pittman, J. (2012) Do IRS Audits Deter Corporate Tax Avoidance? The Accounting Review 87(5): 1603–1639.Google Scholar
Howell, C. (1992) The Contradictions of French Industrial Relations Reform. Comparative Politics 24(2): 181–197.CrossRefGoogle Scholar
Howell, W. G. (2003) Power Without Persuasion: The Politics of Direct Presidential Action. Princeton, NJ: Princeton University Press.Google Scholar
Internal Revenue Service Data Books (1978–2010) Reports available at http://www.irs.gov/uac/SOI-Tax-Stats-IRS-Data-Book. Washington, DC: Internal Revenue Service.Google Scholar
Kagan, E. (2001) Presidential Administration. Harvard Law Review 114: 2245–2385.Google Scholar
Keith, R. (2008) CRS Report for Congress: Introduction to the Federal Budget Process. Congressional Research Service, Washington, DC, http://opencrs.com/document/98-721/2008-03-07 (accessed 1 April 2012).Google Scholar
Kelley, C. S. and Marshall, B. W. (2008) The Last Word: Presidential Power and the Role of Signing Statements. Presidential Studies Quarterly 38(2): 248–267.Google Scholar
Kopczuk, W. (2006) Tax Simplification and Tax Compliance: An Economic Perspective. In Sawicky, M. (ed.), Bridging the Tax Gap: Addressing the Crisis in Tax Administration. Washington, DC: Economic Policy Institute, 111–143.Google Scholar
Lewis, D. E. (2003) Presidents and the Politics of Agency Design. Redwood City, CA: Stanford University Press.Google Scholar
Mahoney, J. and Thelen, K. (2010) A Theory of Gradual Institutional Change. In Mahoney, J. and Thelen K. (eds.), Explaining Institutional Change: Ambiguity, Agency and Power. New York, NY: Cambridge University Press, 1–37.Google Scholar
Margasak, L. and Solomon, J. (1999) Congress, White House spur IRS audits of foes, Pittsburgh Post-Gazette, A-1, 16 November.Google Scholar
Mattos, J. (1997) Senate Targets IRS Probes of Conservatives, Time Magazine, 24 March. http://content.time.com/time/nation/article/0,8599,7859,00.html (accessed 27 February 2010).Google Scholar
Mayer, K. R. (2001) With the Stroke of a Pen: Executive Orders and Presidential Power. Princeton, NJ: Princeton University Press.Google Scholar
Moe, T. M. (1987) An Assessment of the Positive Theory of “Congressional Dominance”. Legislative Studies Quarterly 12(4): 475–520.Google Scholar
Novack, J. (2014) Starve the IRS Beast, Punish the Average Taxpayer, Forbes, 9 January. http://www.forbes.com/sites/janetnovack/2014/01/09/starve-the-irs-beast-punish-the-average-taxpayer/ (accessed 4 April 2014).Google Scholar
Olson, M. (1995) Regulatory Agency Discretion Among Competing Industries: Inside the FDA. Journal of Law, Economics, and Organization 11(2): 379–405.Google Scholar
Olson, M. (1996) Substitution in Regulatory Agencies: FDA Enforcement Alternatives. Journal of Law, Economics, and Organization 12(2): 376–407.Google Scholar
Pfiffner, J. P. (2008) Power Play: The Bush Administration and the Constitution. Washington, DC: The Brookings Institution Press.Google Scholar
Poterba, J. (1994) State Responses to Fiscal Crises: The Effects of Budgetary Institutions and Politics. The Journal of Political Economy 102(4): 799–821.Google Scholar
Reed, R. W. (2006) Democrats, Republicans, and Taxes: Evidence that Political Parties Matter. Journal of Public Economics 90(4–5): 725–750.Google Scholar
Rocco, P. and Thurston, C. (2014) From Metaphors to Measures: Observable Indicators of Gradual Institutional Change. Journal of Public Policy 34(1): 35–62.Google Scholar
Scholz, J. T. and Wood, B. D. (1998) Controlling the IRS: Principals, Principles, and Public Administration. American Journal of Political Science 42(1): 141–162.Google Scholar
Steuerle, E. C. (2008) Contemporary U.S. Tax Policy. Washington, DC: Urban Institute Press.Google Scholar
Temkin, J. H. (2010) The State of IRS Enforcement Efforts. New York Law Journal 243(95): 3–10.Google Scholar
Temple-West, P. (2011) U.S. IRS Commissioner Challenges Budget Cuts, Reuters, 17 October.Google Scholar
The New York Times Editorial Board (2006) No Taxes Until After the Election, The New York Times, A14, 28 October.Google Scholar
Thurber, J. A. (1988) The Consequences of Budget Reform for Congressional-Presidential Relations. Annals of the American Academy of Political and Social Science 499: 101–113.CrossRefGoogle Scholar
Weingast, B. R. and Moran, M. J. (1983) Bureaucratic Discretion or Congressional Control? Regulatory Policymaking by the Federal Trade Commission. The Journal of Political Economy 91(5): 765–800.CrossRefGoogle Scholar
Whitford, A. B. (2012) Signing Statements as Bargaining Outcomes: Evidence from the Administration of George W. Bush. Presidential Studies Quarterly 42(2): 343–362.Google Scholar
Wlezien, C. (1994) The Politics of Impoundments. Political Research Quarterly 47(1): 59–84.CrossRefGoogle Scholar
Wood, B. D. (1990) Does Politics Make a Difference at the EEOC? American Journal of Political Science 34(2): 503–530.Google Scholar
Wood, B. D. (1992) Modeling Federal Implementation as a System. American Journal of Political Science 36(1): 40–67.CrossRefGoogle Scholar
Wood, B. D. and Waterman, R. (1991) The Dynamics of Political Control of the Bureaucracy. American Political Science Review 85(3): 801–828.Google Scholar
Wood, B. D. and Waterman, R. (1993) The Dynamics of Political-Bureaucratic Adaptation. American Journal of Political Science 37(2): 497–528.CrossRefGoogle Scholar
Wooldridge, J. M. (2008) Introductory Econometrics. Cincinnati, OH: South-Western College Pub.Google Scholar
Young, M., Reksulak, M. and Shughart, W. F. (2001) The Political Economy of the IRS. Economics & Politics 13(2): 201–220.Google Scholar