Domestic literacy levels make “corr” audits difficult and spur TAS to launch a pilot program using a “virtual service delivery” as another option

TAS is looking to use video conferencing in order to better facilitate examiners and taxpayers during the examination process and to reach “underserved” taxpayers.  Highlights Tampa as an area where underserved taxpayers are concentrated, but no mention of the lonely expat. Get audited in the comfort of your own home, just make sure they can’t see your Lear jet through the window.


9 thoughts on “Domestic literacy levels make “corr” audits difficult and spur TAS to launch a pilot program using a “virtual service delivery” as another option

  1. As a Swedish American, residing in Sweden, I find it interesting that TAS went to Sweden for guidance. It shows that the TAS really are the “good guys” in the IRS who are trying to be progressive and improve the relationship with taxpayers.

    While many Swedes will disagree with me, I would say that the majority of Swedes feel that Skatteverket is helpful. This is shown in customer satisfaction surveys in which the Swedish Tax Authority, Skatteverket, comes out as the Number 1 liked public agency.

    For those Swedes reading this who will disagree with me, my only comment is that it is all relative. Skatteverket, while tough in enforcing tax collection, is reasonable. The experiences in OVDP and OVDI have shown that the IRS is not.

    As someone who has experienced both tax systems, I also rate the Customer Service in Skatteverket highly and consider it to be the way tax collection should be done.

    Starting in the 1990s, the Swedish Tax Agency took the decision to simplify their tax forms as well as to develop a tough, but respectful relationship with its “customers”. While the US gives lip service to this in various public forums, Skatteverket truly tries to implement it. While no one likes filling out tax forms, I find the Swedish one simple to understand and can submit them electronically.

    Compared to filling out dozens of pages on my US tax declaration with calculations that are so complicated that I must pay an accountant, my Skatteverket form is 3 pages long and I can make comments to explain or add things I am declaring.

    While Swedish is the national language, to make it easy for immigrants to understand, the documents and web pages are available in English and a host of other languages. As far as I can tell, the IRS only made the OVDI program information available in a number of languages – just what was needed to scare immigrants into joining.

    Proof of the more positive approach of the Swedish Tax Agency is that one can find a document called “Right from the Start” on their website along with the necessary form. The documents cites the Swedish approach based on research into the value of respecting your taxpayers and not declaring them guilty from the start. It can be found on their website at:

    Additionally, the Swedish Tax Agency has also presented their philosophy at various international conferences. I refer readers to presentations from the conference at the Inter American Tax Center at:

    Take a look at the Swedish presentation and note what they say in their presentation. Compare that to the meager mention the US gives to similar issues. The Swedish Tax Agency states:

    “Tax morale is about taxpayer’s inner motivation to pay taxes. It is about what someone think is the right way to handle a situation. As a consequence, it is not possible to force someone to have a certain morale regarding tax issues.

    What we as tax administrations can do is however to create an environment and a relationship that contributes to voluntary compliance based on knowledge about what motivates taxpayers to comply. It is in this sense; we in the Swedish Tax Administration have built our strategies.
    We have a vision “A society in which everyone is willing to pay their fair share” and goals regarding trust and a good taxpayer relation. We aim to get it “Right from the start”.

    There are a lot of drivers affecting taxpayer’s compliance behaviour and a recent published OECD note gives a broad overview of research done in this area. The findings indicate that there are a lot of circumstances that affects the taxpayer’s behaviour, like deterrence, norms and fairness.

    Our findings in The Swedish Tax Agency are that we have realized that we in the past underestimated the importance of perceived fairness and trust when it comes to tax morale and inner motivation. We were too focused on what we were doing and did not reflect enough on how we carried out our activities and how our actions was perceived by the taxpayers.

    We believe we can contribute to a pro compliance environment and increase inner motivation to comply by understanding things from a taxpayer perspective. In this sense we focus on issues like trust, the way we communicate and procedural justice.

    The way that agencies carry out their work affects people’s perception and trust of the agency. It’s not the case that agencies like the Swedish Tax Agency who takes money from people are less popular compared to agencies that gives money in form of different contributions. In Sweden the result is the other way around, the Tax Agency is far more liked compared to the National Insurance Agency who provide different kind of monetary support.”

    It is good that the TAS feels that they can learn from the Swedish Tax Agency. If only the rest of the IRS felt this way.

  2. I want to point out another interesting document for readers of the Isaac Brock Society. This document compares Voluntary Disclosure in the US to other Voluntary Disclosure programs throughout the world. You can compare voluntary disclosures of different countries in this 2010 OECD comparison study of different Voluntary Disclosure.

    I only know the terms of Sweden’s voluntary disclosure because I reside there and there is a lot of publicity about it designed NOT to scare people from coming in, but to “get it right”.

    The Swedish Tax Authority usually requires six years of past returns and their attitude is very much: “Thank you for coming in. Your reasons don’t really matter. You have come in. The most important thing now is that together we calculate your taxes correctly and you pay your fair share which is the taxes plus interest.” Nothing more is required.

    Right now there are a lot of new recruits to the tax terror club in the Swedish-American community. Many are confused and think they should do a voluntary disclosure. Residing in Sweden, which handles people in a fair way, one can only hope that they are not so naïve as to think that a voluntary disclosure to the IRS would be handled as it would be in Sweden.

  3. @Lisa: Thanks so much for the Swedish perspective. Like Sweden, Canada has a high tax rate. It’s great to have you here sharing that info.

    Also like Sweden, Canada Revenue Agency is respectful, fair but firm. You will find most of the Canadian citizens and residents here have developed an incredible respect for CRA because of what we’ve learned about IRS. Two weeks ago, I did my return and e-filed it. Within 10 days, I had my Notice of Assessment delivered by Canada Post. My significant refund had already been directly deposited directly into my bank account. (Oh no, that’s one of those bank accounts IRS wants access to under FATCA!).

    I hope you will continue to share the Swedish experience with us. We are learning a lot from countries around the world. I have a personal interest in Sweden because my father’s family was Swedish. Our high school exchange student, whom I’ve recently reconnected with was from Bolivia, but she is now a physician in Sweden, where she has lived for 25 years. .

  4. @ Badger

    After conversing on Twitter and reading that article, Just Me and I agree that Nina Olson should replace Shulman as Commissioner when he leaves in November.

  5. I second that motion!

    Nina is very much into the concept of “tax morale”, i.e. building trust and respecting your taxpayers to increase compliance which the Swedes picked up on ages ago. She also wants to make things easier for taxpayers. While some might find the concept of video audits intrusive, as broadband is widespread in Sweden and we can even submit our taxes by text messaging (SMS), we view this as just another use of technology to help both parties.

  6. @all sadly I think that Nina seems too much to care about people in this climate of mean spiritedness and unwillingness to make the type of long term investments that the system needs. We can always hope though.

  7. @Lisa…
    Great comments on the Swedish system. I do wish the IRS could learn from other countries, but sadly, it is not in their genetic make up. The leadership probably sees Nina as foreign and irrelevant. She doesn’t practice “shock and awe” and that is the American Way!

  8. @Lisa;
    very interesting reading, and to see comparisons of what is being done in other countries. Thank you for the links, and for the description of the Swedish experience.

    Found myself thinking after reading the OECD report, noted that I didn’t see anything in the OECD report that made mention of extra-territorial taxation based on citizenship – or overlapping claims on citizens by more than one country, or the unique FBAR and FATCA system invented by the US – which would have been a good addendum – given the current difficulties – which go far far beyond a mere assessment of earnings for US ‘persons’. Since that is an egregious example of US exceptionalism that is so glaring, and affects so many, it would have been nice to have at least been a footnote.

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