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Treasury Inspector General for Tax Administration

Press Release


January 18, 2011
TIGTA - 2011-4
Contact: Karen Kraushaar
(202) 622-6500
karen.kraushaar@tigta.treas.gov
TIGTA-PAO@tigta.treas.gov

The IRS Needs To Conduct Research To Identify The Needs And Preferences Of Small Business Taxpayers, TIGTA Finds

WASHINGTON – The Internal Revenue Service (IRS) is taking steps to improve customer service to small business and self-employed taxpayers, but it still needs to conduct research to identify their needs and preferences, according to a new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

“The IRS conducts research on individual taxpayers so it can incorporate their needs when making service improvement decisions, but it has only begun to conduct comparable research concerning the needs of the small business taxpayer,” said J. Russell George, the Treasury Inspector General for Tax Administration. “As a significant portion of the Tax Gap is attributed to small businesses and self-employed taxpayers, understanding more about their needs could yield dividends.”

The Small Business/Self-Employed (SB/SE) Division serves approximately 57 million taxpayers, which represents roughly one-third of the overall taxpayer base and consists mainly of self-employed individuals and small business corporations and partnerships with assets of fewer than $10 million. It supports the IRS’s goal of improving customer service by educating and informing these taxpayers of their tax obligations, developing educational products and services, helping them understand and comply with applicable laws, and protecting the public interest by applying the tax law with integrity and fairness.

The IRS attributes $148 billion, or 43 percent, of the Tax Gap to unreported income earned by unincorporated businesses and the associated unpaid self-employment tax. The Tax Gap represents the difference between what taxpayers owe the Federal Government and what they actually pay on time.

TIGTA made two recommendations, to which the IRS agreed.

To view the complete report, including the objectives, scope and methodology, visit: http://www.treas.gov/tigta/auditreports/2011reports/201140010fr.pdf.

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