With the 2022 tax season now officially over, many taxpayers are facing an unusual problem. The Internal Revenue Service, the U.S. federal tax collection agency, has warned filers of significant delays in processing federal tax refunds because of ongoing funding and personnel cutbacks at the agency. While most Americans rarely give much thought to the IRS, this year’s even slower customer service is likely to cause widespread dissatisfaction.
Lukewarm public support for the IRS is nothing new. But research finds that continuing negative attitudes toward the agency could exacerbate a second ongoing problem: a steep decline in the IRS’s ability to enforce the tax code and collect revenue from tax cheats.
Two things might boost public support for the IRS: information about its underfunding and appeals to Republicans’ and Democrats’ core values. That increased support might push Congress to invest in the U.S. central tax authority. Here’s what our research says.
Why support for the IRS matters
Political scientists find that a lack of support for central tax agencies is remarkably bad for democracy. The IRS plays a key role in supporting what social scientists call “state capacity,” or the U.S. ability to run a functioning government. Without the IRS collecting taxes and enforcing the tax code, the U.S. federal government would very quickly collapse into total dysfunction.
While this may sound unlikely, the IRS has been slowly hollowed out over the past several decades. Imperatives to reduce federal spending have led successive Congresses to cut funding allocated to IRS tax enforcement by nearly a third between 2010 and 2019, during periods of both Democratic and Republican control. The IRS now employs about 16,000 fewer tax enforcement employees than it did in 2010. As a result of this belt-tightening, the IRS is becoming much less able to enforce the tax code, meaning that, according to the Treasury Department’s inspector general, it has failed to collect billions in revenue owed to the government over the past decade.
Partisan values and the IRS
We wanted to test ways to spur partisans’ support for the IRS by invoking core values that resonate with the basic worldviews of Republicans and Democrats. First, we theorized that a reminder about the IRS’s role in reducing federal budget deficits might resonate with Republicans’ core value of fiscal conservatism. That claim would be grounded in reality: One estimate suggested that improved tax enforcement could have eliminated about three quarters of the 2019 federal budget shortfall.
Next, for Democrats, we theorized that highlighting the IRS’s role in reducing economic inequality would increase support for the agency. Most revenue lost to tax evasion is owed by wealthy Americans; strengthening enforcement would boost the egalitarian, redistributive nature of the U.S. tax system.
How we did our research
To evaluate the effectiveness of these messages, we conducted an experimental survey study on Sept. 22 and 23, 2021. We used Lucid to recruit a sample of 1,559 Americans selected to be representative on dimensions like gender, age, income, education and region of residence.
In the study, we randomly subdivided the sample into four groups. In the control group, respondents received a basic message explaining that IRS funding and staffing has recently declined. The second group of respondents read that message, alongside a statement that declining IRS funding and staffing is currently damaging the U.S. government’s ability to collect taxes. We called this our “generic” explanation.
The third and fourth groups of respondents read the same message that the “generic” group did, along with an additional message each, designed to invoke partisan values. The third group further read about the IRS’s role in reducing budget deficits, or what we called the “deficit” explanation. The fourth group further read an explanation about how IRS enforcement combats income disparities, or what we called the “inequality” explanation. While the “deficit” message targeted Republican core values and the “inequality” message was meant for Democrats, the messages were read by Republicans, Democrats and Independents alike.
Then we asked a series of questions about support for the IRS and its core functions. We also asked whether respondents would be willing to take action on the IRS’s behalf, by contacting their congressional representatives after the conclusion of the survey.
What messages increased support for IRS funding?
The figure below shows what we found for Republicans and Democrats (including “leaning” partisans). Our “generic” message — that lack of funding hurt the IRS’s ability to collect taxes — increased respondents’ support for more IRS funding. The appeals to partisan core values, however, made an ever bigger difference, especially to the targeted party supporters.
As you can see, when Republicans read the generic message, their support for IRS funding went up less than 3 percent. When they read that increased IRS enforcement could reduce inequality, their support increased by a total of 6 percent. However, when they read about potential IRS effects on the budget deficit, their support increased by about 11 percent.
As we expected, Democrats responded most to the inequality message, which increased their support for the IRS by roughly 8 percent. For them, learning about a potentially reduced deficit increased their support by only about 2 percent, but generic information about the IRS decline over time increased their support for the agency’s funding by about 4 percent.
For respondents of both parties, appealing to their party’s core values had the biggest effect.
The future of the IRS
The recent Build Back Better bill included provisions to strengthen IRS enforcement. Its failure means that the IRS continues to have less funding than it needs to fulfill its responsibilities.
Research finds that members of Congress do respond to public opinion and pressure. Proponents of the IRS may wish to remind Americans that the agency does more than issue refunds; it also reduces budget deficits and builds a fairer economy.