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 be tter 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.