SOLICITATION NOTICE
B -- Behavioral Experiment Transparency vs Burden
- Notice Date
- 9/16/2011
- Notice Type
- Combined Synopsis/Solicitation
- NAICS
- 541611
— Administrative Management and General Management Consulting Services
- Contracting Office
- Department of the Treasury, Internal Revenue Service (IRS), National Office Procurement (OS:A:P), 6009 Oxon Hill Road, Suite 500, Oxon Hill, Maryland, 20745
- ZIP Code
- 20745
- Solicitation Number
- TIRNO-11-Q-00349
- Archive Date
- 9/27/2011
- Point of Contact
- Tracy Holland, Phone: 202-283-1356
- E-Mail Address
-
tracy.holland@irs.gov
(tracy.holland@irs.gov)
- Small Business Set-Aside
- N/A
- Description
- The Internal Revenue Service (IRS) intends to issue a sole sourced purchase order to the University of Minnesota's Social Behavior Science Division Research Professors: Marsha Blumenthal and Laura Kalambolidis, for research experiments, data to explore the impacts of Behavioral experiments of alternative reporting regimes: transparency vs. burden. BACKGROUND: The project involves a three-stage laboratory experiment to explore taxpayers' willingness to accept increased reporting burden in exchange for either earnings or non-transparency of earnings to the authority. The first stage is designed to induce subjects to reveal their tendency to under-report taxable earnings in a voluntary reporting system with random audits and penalties for under-reporting. The second stage tests subjects' willingness to pay for burden reduction when there is no opportunity to under-report earnings. The third stage presents subjects with two alternative regimes. One regime shall have no reporting burden, there shall be no opportunity to misreport. In the alternative regime subjects shall have to track their earning (a burden,) but subjects sha ll have the opportunity to increase their payoff by misreporting. Using our knowledge from the first two stages about subjects' tendency to under-report, analysis of third stage behavior shall tell us whether the regime choice is an effective mechanism for separating compliant and non-compliant taxpayers. The proposed experiment is related to previous research on matching vs. rebate subsidies for charitable contributions. However, the setting for these experiments shall be in the context of income reporting and thus more broadly applicable to voluntary reporting of income and deduction items. The experiments shall help determine if alterative reporting structures can be constructed where compliant taxpayers self select into a structure where audits are not required and reporting burden is lower, and taxpayers who have a propensity to make deliberate errors choose the structure where misreporting is possible and reporting are not transparent. Such a structure provides the opportunity to make improvements is tax system that would make everyone better off. SCOPE OF WORK: The IRS is seeking to further explore alternative reporting regimes and the relationships between reporting burden and compliance. The Vender shall conduct the experiments with the assistance of SB/SE Research. The experiments should be conducted in a computer lab with at least 40 terminals and sufficient software design and run the experiments. The experiments should be conducted at a time and a location that shall facilitate recruitment of subjects. The proposed experiments shall involve approximately 500 subjects/subject hours. The vender is responsible for recruiting, screening and compensating the subjects. The vendor, with the assistance of SB/SE Researchers, shall use the data from the experiments to explore the relationships between reporting burden and economic transparency and the subjects reporting decisions. Overview of Experiments: The project involves a three-stage laboratory experiment to explore taxpayers' willingness to accept increased reporting burden in exchange for either earnings or non-transparency of earnings to the authority. The first stage is designed to induce subjects to reveal their tendency to under-report taxable earnings in a voluntary reporting system with random audits and penalties for under-reporting. The second stage tests subjects' willingness to pay for burden reduction when there is no opportunity to under-report earnings. The third stage presents subjects with two alternative regimes. One shall have no reporting burden, but subjects' actions shall be transparent, providing no opportunity to misreport. The alternative regime shall impose a burden, but subjects shall have the opportunity to increase their payoff by misreporting. Using our knowledge from the first stage about subjects' tendency to under-report, analysis of third stage behavior shall tell us whether the regime choice is an effective mechanism for separating compliant and non-compliant taxpayers. That is, we can observe the correlation between subjects' tendency to misreport (in stage 1) and their willingness to accept a higher burden in exchange for the opportunity to misreport (in stage 3). In each stage, subjects shall engage in an activity to earn an income. Subjects' earnings will be determined by how many of the tasks they can complete in a fixed amount of time. The payment per completed task shall vary by round. Subjects can complete as many rounds as possible within a fixed amount of time set for the stage. Subjects shall voluntarily report their earnings at the end of each round, and that income shall be subject to a tax. Subjects can begin the next round once they have reported their income from the previous round. Reported amounts shall be verified (audited) for a randomly selected subset of participants. Monetary penalties shall be imposed for under-reporting earnings. Prior to each round, subjects shall be informed of the payment rate, tax rate, and audit rate. Designing and Running the Experiments: The vender(s) shall design and run the experiment proposed above. This shall include the computer programming for the experiments, recruiting subjects, securing the lab, compensating the subjects. Each subject shall participate in 3 stages of the experiments. Stage 1: Non-transparency of earnings and zero reporting burden. At the end of the earning period in each round, the computer shall provide subjects with accurate calculations of their earnings. Knowing their true earnings as well as the rates of tax, audit, and penalty, subjects will choose how much to report. Reports shall be randomly audited, with audit rates varying by round. If a report is not audited in a round, the tax is based on reported earnings. If a report is audited, the tax is based on true earnings. Subjects found to have under-reported will be charged a penalty based on the magnitude of the under-report. Stage 2: Transparency of earnings and non-zero reporting burden. In each round, subjects shall choose between tracking and reporting earnings themselves and paying a fee for an accurate calculation from the computer. There is no opportunity to mis-report. For those subjects who choose to self-report, the computer will check their work and adjust the tax bill to reflect the correct earnings (effectively, a 100 percent audit rate), charging a penalty for errors. This way, all mis-reporting shall be due to error, not deliberate non-compliance. Subjects who feel they have an advantage in record-keeping shall choose to self-report, forgoing the fee. Varying the computing fee and wage rate (payment per task) will reveal subjects' willingness to pay for burden reduction. Subjects will face both stages 1 and 2 before stage 3, but the order in which they face the first two stages will be randomized. Stage 3: Trading off transparency of earnings and reporting burden. Prior to the earning period in each round, subjects shall choose between two regimes: One in which the computer tracks and reports their earnings to the authority and an alternative in which the subject must track and report their earnings. Subjects who choose the second regime will choose how much of their earnings to report, reports shall be randomly audited, and penalties for under-reporting will be applied. Varying the burden of tracking and reporting earnings shall reveal subjects' willingness to accept burden in exchange for non-transparency. The completion of this sub-task will result in the following: •1) Documentation of the procedures used to conduct the experiments •2) Database of the results of the experiment; NOTE: THIS IS NOTICE OF INTENT IS NOT A REQUEST FOR COMPETITIVE PROPOSALS. However, al interested parties who identify their interest in this synopsis/solcitation shall be considered. No solicitation will be issues, therefore, all requests for the solicitation shall be considered non-responsive. A determiniation not to compete this action based upon response received is in the sole discretion of the Government. All interested parties must express their interest and capabilities in writing via facsimile or e-mail with in ten (10) calendar days of the published date of receipt of fax or e-mail transmission is the sole responsibility of the contractor. All Treasury contractors must be actively registered in Central Contractor Registration (CCR) at time of contract award. If no responses are received the award shall be made to the University of Minnesota Professor Laura Kalambodidis. NAICS: 541611 Clauses: FAR 52.232-33 Payment by Electronic Transfer CCR; FAR 52.204-2 Security Requirements; FAR 52.212-4 Contract Terms Cpmmercial Items;
- Web Link
-
FBO.gov Permalink
(https://www.fbo.gov/spg/TREAS/IRS/NOPAP/TIRNO-11-Q-00349/listing.html)
- Place of Performance
- Address: Internal Revenue Service, 625 Fulton Street, Brooklyn, New York, 11201, United States
- Zip Code: 11201
- Zip Code: 11201
- Record
- SN02580872-W 20110918/110917000717-bdae9cef8d99cf042ebabf415de53b6e (fbodaily.com)
- Source
-
FedBizOpps Link to This Notice
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