We estimate the returns to IRS audits of taxpayers across the income distribution. We find an additional ${\$}$1 spent auditing taxpayers above the 90th income percentile yields more than ${\$}$12 in revenue, while audits of below-median income taxpayers yield ${\$}$5. We construct our estimates by drawing from comprehensive internal accounting information and audit-level enforcement logs. We begin by estimating the average initial return to all audits of US taxpayers filing in tax years 2010–2014. On average, ${\$}$1 in audit spending initially raises ${\$}$2.17 in revenue. Audits of high-income taxpayers are more costly, but the additional revenue raised more than offsets the costs. Audits of the 99–99.9th percentile have a 3.2:1 initial return; audits of the top 0.1% return 6.3:1. We then exploit the 40% audit reduction between tax years 2010 and 2014 to examine the returns to marginal audits. We find they exceed the returns to average audits. Revenues remain relatively unchanged but marginal costs fall below average costs due to economies of scale. Next, we use randomly selected audits to examine the impact of an initial audit on future revenue. This individual deterrence effect produces at least three times more revenue than the initial audit. Deterrence effects are relatively consistent across the income distribution. This results in the 12:1 return above the 90th percentile. We conclude by estimating the welfare consequences of audits using the MVPF framework and comparing audits to other revenue-raising policies. We find that audits raise revenue at lower welfare cost.

中文翻译：

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收入分配中税务审计的福利分析


我们估计了整个收入分配中纳税人的国税局审计回报。我们发现，对收入高于第 90 个收入百分位的纳税人进行审计时，额外花费 ${\$}$1 产生的收入超过 ${\$}$12，而对收入低于中位数的纳税人进行审计产生的收入为 ${\$}$5。我们通过提取全面的内部会计信息和审计级执行日志来构建我们的估计。我们首先估算 2010-2014 纳税年度对美国纳税人申报的所有审计的平均初始申报表。平均而言，${\$}$1 的审计支出最初会带来 ${\$}$2.17 的收入。对高收入纳税人的审计成本更高，但筹集的额外收入足以抵消成本。第 99-99.9 个百分位数的审核初始回报为 3.2：1;对前 0.1% 的审计回报率为 6.3：1。然后，我们利用 2010 年至 2014 纳税年度之间 40% 的审计减免来检查边际审计的回报。我们发现它们超过了平均审计的回报率。收入相对保持不变，但由于规模经济，边际成本低于平均成本。接下来，我们使用随机选择的审计来检查初始审计对未来收入的影响。这种单独的威慑效果产生的收入至少是初始审计的三倍。威慑效果在整个收入分配中相对一致。这导致 12：1 的回报率高于第 90 个百分位数。最后，我们使用 MVPF 框架估计审计的福利影响，并将审计与其他增收政策进行比较。我们发现审计以较低的福利成本增加收入。