Using administrative records to improve official statistics produced by the Statistics of Income Division,IRS

Abstract

The Statistics of Income (SOI) Division of the U.S. Internal Revenue Service (IRS) uses administrative data from tax and information returns to collect information for its statistical studies. This paper reviews fundamental “Big Data” issues with respect to tax data and highlights initiatives to better leverage administrative tax data for statistical purposes. Among the topics addressed are the current uses of administrative datasets in developing statistical samples and the benefits of large administrative data sets for producing small-area estimates or public-use files while ensuring statistics satisfy applicable data quality standards. New processes to create geographic statistics and public-use data files are also discussed. Also explored are ways to efficiently access large datasets and overcome limitations of filing requirements on statistical uses of administrative data. Finally, future applications of administrative data to produce tax statistics, as well as efforts to improve metadata in support of longitudinal analyses, are examined.

Keywords

Administrative data Big Data small-area estimates geographic statistics public-use data

Get full access to this article

View all access options for this article.

References

Commission on Evidence Based Policy Making. The promise of evidence-based policy making; 2017. Available from https://www.cep.gov/cep-final-report.html.

American Statistical Association. Report of the ad hoc Committee on Privacy and Confidentiality; The American Statistician, 1977; 31, 59–78.

Wilson,

. Statistics of income: a by-product of the U.S. tax system, Statistics of Income Bulletin, Internal Revenue Service, Washington, D.C.; 1988.

Cartwright,

Armknecht,

. Statistical uses of administrative records, Proceedings, Section on Survey Research Methods, American Statistical Association, 1979; 73–76.

Garnick,

Gonzalez,

. Statistical uses of administrative records: where do we go from here? Proceedings, Section on Survey Research Methods, American Statistical Association; 1979.

Brackstone,

. Statistical uses of administrative data: issues and challenges, Statistical Uses of Administrative Data Proceedings; 1987; 5–26.

Internal Revenue Service, Statistics of Income Division. SOI sampling methodology and data limitations; 2017. Available at https://www.irs.gov/pub/irs-soi/sampling.pdf.

Harte,

. Some mathematical and statistical aspects of the transformed taxpayer identification number: a sample selection tool used at the IRS, Proceedings, Section on Survey Research Methods, American Statistical Association; 1986. Available at https://www.irs.gov/pub/irs-soi/harte.pdf.

Riley,

. Unrelated business income tax returns, 2004, Statistics of Income Bulletin, Internal Revenue Service; Winter 2008.

10.

Harte,

Hilgert,

. Enriching one sample while improving another: linking differently stratified samples of documents filed by exempt organizations, Turning Administrative Systems Into Information Systems, Internal Revenue Service, 1992; 121–127.

11.

Smith,

. The Social Security Administration’s Continuous Work History Sample, Social Security Bulletin, 1989; 52(10), 20–28. Available at: https://www.ssa.gov/policy/docs/ssb/v52n10/v52n10p20.pdf.

12.

Weber,

Bryant,

. The 1999 individual income tax return edited panel; 2005. Available at: https://www.irs.gov/pub/irs-soi/05weber.pdf.

13.

United States Office of Management and Budget. Federal Committee on Statistical Methodology, Statistical policy working paper 6 – report on statistical uses of administrative records; 1980.

14.

Jensen,

. The quality of administrative data from a statistical point of view: some Danish experience and considerations, Statistical Uses of Administrative Data Proceedings, 1987; 291–300.

15.

Sailer,

Weber,

. Creating household data from individual income tax returns, Proceedings, Section on Survey Research Methods, American Statistical Association; 1996.

16.

Brown,

Mazur,

. IRS’ comprehensive approach to compliance measurement, 2003 National Tax Association Spring Symposium; June 2003. Available at https://www.irs.gov/pub/irs-soi/mazur.pdf.

17.

Sailer,

Weber,

. The IRS population count: an update, Proceedings, Section on Survey Research Methods, American Statistical Association; 1999.

18.

Internal Revenue Service. Internal Revenue Service Data Book, 2014; publication 55B; 2015; 38.

19.

Petska,

Strudler,

. The distribution of individual income taxes: a new look at an old issue, Turning Administrative Systems Into Information Systems, Internal Revenue Service; 1999; 7–22.

20.

Eller,

. Audit revaluation of federal estate tax returns, Statistics of Income Bulletin, Internal Revenue Service; Winter 2001.