A new way of looking at international tax administration.

As many as 61 percent of U.S. taxpayers living abroad fail to file U.S. tax returns. That was the conclusion reached by the U.S. Accounting Office (GAO) in 1986, and more recent data suggests that noncompliance by expatriates continues to be a serious problem.

Noncompliance is a concern, not just for tax administrators, but also for tax professionals in the private sector and all Americans who support our system of government with their tax dollars. What can be done to reverse this trend? Currently, the Internal Revenue Service is significantly changing the way we look at compliance issues. In the coming decade, we are determined to improve voluntary compliance, reduce the burden on taxpayers, and increase quality-driven productivity and customer satisfaction.

Sounds great, but how are we going to do it? That is where a new way of looking at tax administration is critical. We plan to do much more than just examine tax returns. We are committed to the proposition the major portion of noncompliance is caused by the taxpayer's lack of understanding of what is required in the first place. We further believe that we must first identify the various market segments we serve, and then identify the roadblocks to voluntary compliance faced by each.

"Compliance 2000" is what we call our new tax administration philosophy. Compliance 2000 suggests that the IRS advocate the simplification of tax laws, regulations, and policies. It emphasizes efforts to inform and educate, and it reserves enforcement actions for situations where other efforts fail. Will it work? We firmly believe it will. Can we do it alone? No! We must work closely with businesses, professional organizations, and others in identifying barriers to voluntary compliance. Strategies for addressing problems identified will be developed and piloted prior to incorporation into our ongoing operations.

One of our Compliance 2000 projects within IRS-international is aimed specifically at reducing the roadblocks to voluntary compliance by expatriates. A committee consisting of IRS personnel and representatives for the private sector will identify and develop strategies for improving voluntary compliance by expatriates. This committee will review the Internal Revenue Code and regulation requirements, complexity of tax forms, and the availability of and ease of access to taxpayer information or assistance.

At this time I would like to offer all TEI members the opportunity to provide comments or suggestions for our effort. You may write to me at Assistant Commissioner (International) Room 4401,950 L'Enfant Plaza, S.W, Washington, D.C. 20024 or fax your ideas to me at [phone].