NITA 2018 Cushman Goal for Today We are going to learn What exactly is voluntary reporting How to leverage voluntary reporting make it work for you True Fact Tax administration and tax collection is scientific ID: 805545
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Slide1
Tax and The Taxpayer Voluntary Reporting
NITA 2018 Cushman
Slide2Goal for Today
We are going to learn:
What exactly is voluntary reporting.
How to leverage voluntary reporting (make it work for you.)
Slide3True Fact
Tax administration and tax collection is scientific.
It is evidence based.
Tax administrators make decisions based on data, and on human psychology.
Slide4If taxation is scientific….
This means that tax administration is not guesswork!
Tax administrators need to know what works and what doesn’t work.
Sneak peek
Education works.
Enforcement works.
And education is often less expensive than enforcement.
Slide5What is voluntary reporting?
There are two basic systems of tax administration -
Billing and invoicing.
We see this system in property tax.
This requires a ton of upfront information about the taxpayer or the taxable event.
Voluntary reporting.
We see this system in many sales and excise taxes.
This is a system for taxpayers to identify themselves (self identify) and come forward to comply with the law.
Slide6Five Objectives - Tax Administrators strive to make sure:
Filing is easy.
Paying is convenient.
Tax obligations are understandable.
Systems are in place to detect and respond to noncompliance
Assistance is available.
Slide7Voluntary Reporting MythBuster
It’s not really “voluntary.”
There is a consequence for not complying.
The tax administrator uses tactics to urge/convince/motivate the taxpayer to comply with the law.
And the best part
If done right, Taxpayers do a lot of our work under this system.
Slide8Duty to Know the Law
In the voluntary reporting system it is the taxpayer’s duty to know the requirements of the law.
The crux is how to find the taxpayer, and how to find them early on before they are out of bounds.
You might have some knowledge, as in a permit to harvest or you require a business license (these are “hooks”)
or
You might not be aware of the taxpayer at all, you only are aware that taxable activities are likely taking place.
Slide95 Examples of Voluntary Reporting
Personal federal Income tax
General business and occupation tax
Use tax
Sales tax
Forest excise tax
Slide10Examples of taxable activities
Vendors on reservation
UPS/Fed Ex Deliveries
Fish Buyers
Internet providers
Transmission towers and infrastructure
Tow trucks
Amazon deliveries
Ice sales
Bounce House Set Up
Moving company
Cattle feeding
Custom Kill
Office support
Janitor services
Mobile pet grooming
Landscaping
Food Carts
Slide11An Effective Voluntary Reporting System Would….
Give plenty of notice.
Educate.
Be fair.
Include due process.
Be legitimate (authority is credible and respected)
Responsive.
Have a rational enforcement framework.
Have Jurisdiction squared away.
Slide12Effective Taxpayer Contact
Changes behavior, so…
To do this it has to reach the taxpayer.
An effective strategy would include:
A documented plan.
Consistency in messaging.
Escalation tactics.
Monitoring.
Flexibility (willingness to adapt to new information)
Slide13Latin Phrase for the Day!
Nihil de nobis, sine nobis.
Not about us without us.
In other words, tax administrators are going to be hard pressed to maintain a cost- effective and productive tax program unless taxpayers are looped in from the start.