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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]
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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 

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