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Tax Administration: IRS Needs to Strengthen Its Approach for Evaluating the SRFMI Data-Sharing Pilot Program
Michael Brostek (au)
The State Reverse File Match Initiative (SRFMI) is one of the IRSís data-sharing strategies to reduce the estimated $345 billion gross fed. tax gap. SRFMI matches fed. and state taxpayer data to identify noncompliant taxpayers -- individuals and businesses who do not file tax returns or do not report all of their income. IRS's document-matching program has proven to be a highly cost-effective way of identifying underreported income, thereby bringing in billions of dollars of tax revenue while boosting voluntary compliance. Based on concerns about whether IRS is fully using data from state and local govíts. to reduce the tax gap, this report assesses IRS's plan for evaluating the effectiveness of the SRFMI pilot taxpayer data-sharing program.
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