Millard Presents Using Behavioral Insights In Notice Design To Improve Taxpayer Responses And Achieve Compliance Outcomes Today At Georgetown

Jan Millard (IRS) presents Using Behavioral Insights in Notice Design to Improve Taxpayer Responses and Achieve Compliance Outcomes (with Anne Herlache (IRS), Alicia Miller (IRS) & Michelle Theel (IRS)) at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Emily Satterthwaite and Dayanand Manoli: 

This paper introduces the Notice Redesign Initiative and highlights its use of behavioral insights (BI). Behavioral insights are drawn from a robust and rapidly growing body of research from the Behavioral Sciences (e.g., psychology, cognitive science, and behavioral economics). This research is centered on how individuals absorb, process, and react to information; that knowledge is then applied to design practical policies and interventions with human behavior in mind. 

The Notice Redesign Initiative aims to improve the effectiveness of collection notices and has incorporated behavioral insights into each of its pilots, including the two presented in this paper: the CP14 and LT16. Both notices are part of the IRS collection stream. The CP14 is the first and most common notice sent to taxpayers and notifies them that they have a balance due. 

The LT16 is one of the last notices to be sent and requests that taxpayers contact the Automated Collection System. Both the CP14 and LT16 pilots have addressed four major goals: 1) increasing payment compliance, 2) increasing the use of self-service tools, 3) reducing taxpayer burden, and 4) reducing costs to the IRS. In this paper, we highlight the pilot results as they pertain to those overarching goals.