Theory and Practice in Tax Administration

This article concerns the history of automation in U.S. tax administration and the challenges automation presents to administering the laws consistent with democratic values. The most under-theorized aspect of tax administration is the expansion of automation and its impact on the current tax system. <br> <br>Historically, the U.S. system of taxation depended on the self-reporting of relevant financial information by taxpayers. The original design of tax administration was built around that premise and required significant human interaction between government employees and taxpayers. <br><br>The rise of what is called Automated Data Processing (ADP) - particularly since WWII - has given the IRS wonderful efficiency in sorting through massive amounts of information. This has allowed it to rely less on the information provided by taxpayers and more on the information provided ABOUT taxpayers by various third parties. ADP has also allowed the IRS to become more efficient at iden