A new way of looking at international tax administration.

• Author: Deanehan, Regina M.

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...