IRS News Release  
September 01, 1997

IRS by the Numbers

Returns / Revenues

Every year the number of tax returns filed by American taxpayers increases, as do the gross collections the IRS brings into the federal government.

Year   Gross Collections   Returns Filed   Indiv. Returns
FY-90  $ 1.056 Trillion    201.7 million   112.5 million
FY-91  $ 1.087 Trillion    203.7 million   114.1 million
FY-92  $ 1.121 Trillion    204.1 million   115.0 million
FY-93  $ 1.177 Trillion    207.4 million   114.2 million
FY-94  $ 1.276 Trillion    205.0 million   114.9 million
FY-95  $ 1.376 Trillion    205.7 million   116.3 million
FY-96  $ 1.487 Trillion    208.9 million   118.8 million

Individual Income Tax Returns (through first week of September)

The vast majority of taxpayers have only one interaction with the Internal Revenue Service in the course of a year -- filing their tax return and receiving their refund.

                           1996                 1997
Returns received:      116,837,000          118,757,000
Refunds sent:           78,274,000           80,583,000
Amount refunded:    $ 95.589 Billion    $ 102.576 Billion
Average refund:         $ 1,222               $ 1,273

Electronic Filing

Since 1986 the IRS has been making it easier for taxpayers to file returns by offering them an array of choices in the way they can file, including electronic filing -- either through return preparers or from personal computers -- and TeleFile, the file-by-phone system. Since 1992 taxpayers in some states have been able to file both their state and federal returns in one transmission.

           Standard ELF    TeleFile      Fed/State
1986         25,000         ------         ------
1987         78,000         ------         ------
1988        583,000         ------         ------
1989      1,161,000         ------         ------
1990      4,193,000         ------         ------
1991      7,575,000         ------         ------
1992     10,924,000         126,000       156,000
1993     12,342,000         149,000       600,000
1994     13,510,000         519,000     1,130,000
1995     11,143,000         680,000     1,554,000
1996     12,139,000       2,840,000     3,165,000
1997*    14,447,000       4,694,000     4,318,000
(* as of Sept. 5)

Taxpayer Service

IRS continues to make it easier for taxpayers to get the information and answers they need in order to file their returns and get information about their tax accounts.

                     FY-92   FY-93    FY-94    FY-95    FY-96
# Assisted (Total)  75.4 M  73.4 M   73.3 M  107.9 M  104.8 M
-- Toll-free        35.7 M  36.2 M   35.5 M   39.2 M   45.1 M
-- TeleTax          32.3 M  30.1 M   30.7 M   61.0 M   53.3 M
-- Walk-In/Corres    7.4 M   7.1 M    7.1 M    7.7 M    6.4 M
Toll-free Access     69.7%   60.4%    53.1%    38.8%    46.0%
Toll-free Accuracy   88.4%   88.7%    90.1%      91%      91%

IRS Budget and Staffing

The increase in IRS workload in terms of returns filed, revenue collected, and taxpayers assisted has been accomplished while the IRS budget has declined in recent years and the size of the workforce has decreased.

          FY-91   FY-92   FY-93   FY-94   FY-95   FY-96   FY-97
Budget   $6.11B  $6.68B  $7.11B  $7.35B  $7.48B  $7.35B  $7.22B
Staff   114,628 116,673 113,460 110,748 112,024 106,351 102,100

Tax Gap Estimates - Tax Year 1992

Each year the size of the individual income tax gap increases. The tax gap is the difference between taxes owed and taxes Americans pay voluntarily and timely in any tax year.

Nonfiling          $ 13.5 - 13.8 Billion
Underreporting     $ 71.3 - 73.1 Billion
Underpayment       $ 8.4 Billion
Gross Tax Gap      $ 93.2 - 95.3 Billion

Accounts Receivable Delinquency Inventory (ARDI)

The IRS maintains an inventory of delinquent accounts receivable -- money that is owed the government. By law, accounts must be kept on IRS’s books for 10 years, whether collectible or not. For 1996 about half of the gross receivable total is considered currently not collectible for various reasons, including personal hardship

FY-96 ARDI ($ in billions)

Gross ARDI                $ 216.3
Pending court action         18.4
Deferred                      1.6
Notices                      10.8
Installment Agreement        13.4
Available for Collection     40.8
Trust Fund                   16.9
Currently Not Collectible   105.8

Currently Not Collectible $ 105.8
Defunct Corporations         32.8
Deceased taxpayer             3.0
Bankrupt                      9.7
Hardship                     29.2
Unable to locate              5.8
Unable to contact             3.3
RTC                          18.4
NonMaster File                3.0
Other                         0.3

Options Offered in the Collection Process

Taxpayers who are unable to pay the full tax they owe have several alternatives -- they can set up an installment arrangement or seek an offer in compromise. IRS has modified procedures to make thse alternatives easier to use.

Installment Agreements

Year #    Taxpayers #     Modules        $ to IAs
FY-91      1,111,470     1,770,297     3,868,792,000
FY-92      1,516,556     2,504,219     5,664,528,000
FY-93      2,543,763     3,946,047     8,500,285,000
FY-94      2,688,673     4,420,014     8,420,032,000
FY-95      2,501,955     4,395,258    10,567,841,000
FY-96      2,670,705     4,769,627    12,142,916,000


Offers-in-Compromise
($ in millions)

                 FY-91   FY-92   FY-93   FY-94   FY-95   FY-96
Received         8,711  17,749  49,954  52,127  58,720  60,893
# Accepted       1,995   4,356  18,020  25,017  26,668  27,673
% Accepted         25%     45%     53%     50%     49%     48%
$ Accepted          37     106     209     281     297     287
$ Total tax owed   140     661   1,377   1,634   1,856   2,169

Collection Yield on Delinquent Accounts

Using the collection tools that Congress has given it, IRS collections of taxes owed the federal government have increased in recent years and have become more efficient, thanks in part to the increased use of installment agreements and offers in compromise

                     FY-92     FY-93     FY-94     FY-95     FY-96
$ collected         $24.23 B  $22.81 B  $23.45 B  $25.15 B  $29.78 B
% change (prior-yr)  -0.2%     -5.9%      2.8%      7.2%     18.4%

Examinations (Audits)

While the number of returns filed each year has grown, the number and percentage of returns examined has remained relatively constant. In fact, taxpayers who report income for which there is matching third-party data filed with the IRS have very little likelihood of being audited.

Audit Coverage Rates
(Income Tax Returns)

           INDIVIDUAL RETURNS   CORPORATE RETURNS
   FY      Percent   # Audits   Percent  # Audits
   1991     1.17    1,313,168    2.52     67,618
   1992     1.06    1,206,019    3.04     79,597
   1993     0.92    1,058,966    3.05     79,873
   1994     1.08    1,225,707    2.31     58,110
   1995     1.67    1,919,437    2.05     51,808
   1996     1.67    1,941,540    2.34     59,832

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