The Internal Revenue Service (IRS) periodically conducts surveys to measure the time and money that individuals spend on pre-filing and filing activities in response to the requirements of the U.S. federal tax system. The survey data are used as an input to the Individual Taxpayer Burden Model (ITBM). The ITBM is a micro-simulation model that is based on econometrically estimated relationships between compliance burden and the tax characteristics available from the associated tax returns of the taxpayers.

The objectives for the model are: to assess the impact of programs on taxpayer burden, to assess the role of burden in tax administration, to fulfill IRS obligations to the Office of Management (OMB) for information required by the Paperwork Reductions Act, and to improve services to taxpayers. Official forecasts of total compliance burden are produced for each fiscal year. In addition, estimates of average compliance burden for each calendar year by tax form are published in the taxpayer instructions as a guide for the taxpayers. Finally, the model supports tax policy decision making through “what-if” type analysis, which allows the IRS to understand better the effect of changing rules or laws or processes.