Identifying the Least Cooperative Taxpayers

The IRS Oversight Board surveyed taxpayers in order to improve what the IRS euphemistically calls its “customer service”. It released a report on the survey findings today.

The survey was conducted during tax season earlier this year, and targeted “1,000 taxpayer households that were representative of the country, along with a supplemental sample of 101 individuals who had visited an IRS Taxpayer Assistance Center (TAC).” The results of the survey were weighted to try to make them more closely represent the taxpaying public at large.

They then divided these responders into six roughly-equally-sized “taxpayer segments” and tallied survey results for each group separately. They characterized these six groups as follows:

  • Confident and In Control
  • Tech Adopters
  • Seeking Assistance
  • Intimidated by the Process
  • Life in Transition
  • Concerned About Privacy

Most of the questions were not of much interest to us here, but a few were. For instance, those surveyed were asked if they agreed with a statement about their “civic duty to pay my fair share of taxes”:

“It’s my civic duty to pay my fair share of taxes.”
taxpayer segment% who agree
Total All Taxpayers94%
Confident & In Control100%
Seeking Assistance99%
Life in Transition69%
Tech Adopters97%
Intimidated by the Process97%
Concerned About Privacy99%

94% of those surveyed “strongly/somewhat agree” with the statement “It’s my civic duty to pay my fair share of taxes”. Only about half of the remainder “strongly/somewhat disagree” with the rest refusing to answer or neither agreeing nor disagreeing.

The wording of the question is vague enough to allow for different interpretations — after all, even I think that it’s everyone’s civic duty to pay their fair share of taxes (I just happen to think that this fair share is zero). But I think it may be useful as an indication of how receptive people might be to arguments for tax resistance.

If so, the information about how different “taxpayer segments” answered this question will be useful to tax resistance outreach efforts. As you can see from the table, the “Life in Transition” segment was much less likely than any other group to agree with the “civic duty to pay” statement. Who are these people? Here’s what the report says about them:

These taxpayers are more likely than average to use a paid preparer and are one of the groups most likely to have received a refund anticipation loan. They are also the most likely group to say they have had a lot of significant changes in their life recently, more likely than average to say they are living paycheck-to-paycheck, and by a large margin…, the least likely to agree that it is their civic duty to pay their fair share of taxes. They are also the most likely segment to say they know how to get in touch with the IRS for help and are more likely than average to have done so over the last two years for help with tax law questions, earned income tax credit issues, and responding to an IRS notice or letter. They are slightly more likely than average to prefer in-person service over self assistance.

The taxpayers in this segment are the youngest of the six, below average in income, but slightly more likely to be college educated. This segment also reflects the highest concentration of women and the most likely segment to have recently married. These taxpayers not only need services from the IRS; they also have the most financial difficulties of any taxpayer segment.

This group of taxpayers is particularly challenging for the IRS.… [T]his group of taxpayers indicates a slightly stronger preference for in-person service over self-service. Nevertheless, given their younger age profile and higher education levels, there may be opportunities for the IRS to move these taxpayers more toward Internet-based solutions.

Two additional questions show taxpayer attitudes about how fair the tax system is, and how well the IRS is doing at administering the tax system fairly:

“The IRS ensures all taxpayers pay their fair share.”
taxpayer segment% who agree
Total All Taxpayers39%
Confident & In Control57%
Seeking Assistance67%
Life in Transition36%
Tech Adopters31%
Intimidated by the Process25%
Concerned About Privacy13%

People are not very confident that others are paying their fair share. This can be used as a wedge for those of us promoting tax resistance, as perceptions that others are getting away with not paying their “fair share” are a powerful incentive for people to reexamine their own willingness to pay.

A related question shows a similar lack of confidence in the fairness of the tax system and of the IRS:

“The IRS is doing a good job of making the tax system fair to everyone.”
taxpayer segment% who agree
Total All Taxpayers31%
Confident & In Control43%
Seeking Assistance57%
Life in Transition31%
Tech Adopters22%
Intimidated by the Process14%
Concerned About Privacy15%