Jan 19th 2011
In an annual survey of taxpayer attitudes, 87 percent responded that cheating on taxes is "not at all" acceptable. That figure is up 3 percent from 2009.
While the vast majority said they were opposed to cheating, 8 percent said "a little here and there" is OK, while 4 percent said it is acceptable to cheat "as much as possible."
The Taxpayer Attitude Survey has been conducted annually since 2002 for the IRS Oversight Board to gain a stronger understanding of taxpayers' attitudes on customer service, IRS performance, and other tax administration issues. In August of last year, 1,000 people were interviewed.
Survey highlights include:
- 97 percent of respondents completely or mostly agreed that "it is every American's civic duty to pay their fair share of taxes." The statement, "Everyone who cheats on their taxes should be held accountable," received 96 percent completely or mostly agree answers. On the other hand, 27 percent of respondents completely or mostly agreed with the statement, "Taxpayers should just have to pay what they feel is a fair amount."
- 80 percent of respondents say personal integrity has a great deal of influence on reporting and paying their taxes honestly. Third-party reporting of income has a great deal of influence for 39 percent of respondents, while fear of an audit greatly influences 35 percent.
- 70 percent find it "very important" that the IRS provides a Web site; 76 percent believe it is very important that the IRS provides a toll-free telephone number.
- 77 percent of respondents said they were very or somewhat satisfied with their personal interaction with the IRS. This includes filing a tax return.
"While few folks would deal with them if they didn't have to, and no on enjoys paying taxes, the IRS does a great job with its resources," Gary Bode, a CPA in Wilmington, N.C., said of the survey results on his firm's Web site. He went on to call the IRS "probably one of the more effective government agencies."
One year ago, the IRS announced that all paid preparers of federal tax returns would be required to meet certain registration, testing, and continuing professional education requirements. That tax preparers be required to meet standards of competency and ethical behavior was considered very or somewhat important by 94 percent of respondents. This is compared with 87 percent in 2007, the first year the question was asked, the Journal of Accountancy reported.
The 2010 Taxpayer Attitude Survey was released to Congress just days apart from the annual Taxpayer Advocate's report for the same year. Taxpayer Advocate Nina Olson touched on the tax preparer issue in a letter to Congress, saying that when the IRS works with the Taxpayer Advocate Service, good things happen.
"For example, when we first proposed regulation of return preparers in 2002, the IRS vigorously opposed the concept. It was not until Commissioner Shulman selected this issue to be one of his major initiatives that the IRS was able to work on an issue that for years it had internally recognized was vitally necessary. Once able to address it, the IRS moved swiftly to establish a regulatory approach," Olson said.
The Oversight Board's survey did not ask about the complexity of the tax code, but Olson considers it the top problem for taxpayers. While the attitude survey shows a strong value is placed on personal integrity, Olson's said in her report that voluntary tax compliance rates are "disturbingly low," according to IRS data. She maintains that if the tax laws were simpler, compliance would rise.
"No one wants to feel like a ‘tax chump' – paying more while suspecting that others are taking advantage of loopholes to pay less," she wrote.
To read the full 2010 Taxpayer Attitude Survey and the National Taxpayer Advocate 2010 Annual Report to Congress.