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<h1>Form 1040 – Individual Income Tax</h1>
<p class="last-paragraph">The Form 1040 study has been the cornerstone of NRP research since the department’s inception in 2000. The 1040 study relies on a statistically representative sample of all filed individual tax returns to measure tax noncompliance and improve internal models for workload selection.</p>
<ol id="tabs-view">
<li><a href="https://nrp.web.irs.gov/1040-study.html#tab1" class=" active">NRP<br>1040 Study</a></li>
<li><a href="https://nrp.web.irs.gov/1040-study.html#tab2" class=" inactive">Average Exam<br>Class Percentage</a></li>
<li><a href="https://nrp.web.irs.gov/1040-study.html#tab3" class=" inactive">NRP<br>1040 Audits</a></li>
</ol>
<div class="tabs-content active" id="tab1">
<h2>NRP 1040 Study</h2>
<p>In 2001, NRP conducted a sample of nearly 45,000 tax returns. When the 1040 study started again in 2006, NRP decided to sample approximately 14,000 returns per year and aggregate the data on a three-year average. For tax years 2016 to 2018, NRP will complete audits on a subsample of 4,000-5,000 cases from its original selections. The NRP sample increased to nearly 8,000 returns in 2019 before decreasing to a subsample of 1,560 for 2020.</p>
<p>Data through the 2014 sample have been completed and posted to the CDW. More recent years are in various stages of audit or data perfection.</p>
<table class="table">
<tbody><tr>
<th>Study Year</th>
<th>Sample Size</th>
<th>Percent Complete*</th>
</tr>
<tr>
<td>2001</td>
<td>44,768</td>
<td>100%</td>
</tr>
<tr>
<td>2006</td>
<td>14,171</td>
<td>100%</td>
</tr>
<tr>
<td>2007</td>
<td>15,277</td>
<td>100%</td>
</tr>
<tr>
<td>2008</td>
<td>15,493</td>
<td>100%</td>
</tr>
<tr>
<td>2009</td>
<td>13,449</td>
<td>100%</td>
</tr>
<tr>
<td>2010</td>
<td>14,129</td>
<td>100%</td>
</tr>
<tr>
<td>2011</td>
<td>14,203</td>
<td>100%</td>
</tr>
<tr>
<td>2012</td>
<td>16,075</td>
<td>100%</td>
</tr>
<tr>
<td>2013</td>
<td>14,767</td>
<td>100%</td>
</tr>
<tr>
<td>2014</td>
<td>14,606</td>
<td>100%</td>
</tr>
<tr>
<td>2015</td>
<td>14,053</td>
<td>100%</td>
</tr>
<tr>
<td>2016</td>
<td>4,840</td>
<td>100%</td>
</tr>
<tr>
<td>2017</td>
<td>4,634</td>
<td>100%</td>
</tr>
<tr>
<td>2018</td>
<td>4,000</td>
<td>100%</td>
</tr>
<tr class="alt">
<td>2019</td>
<td>8,007</td>
<td>98%</td>
</tr>
<tr class="alt">
<td>2020</td>
<td>1,560</td>
<td>92%</td>
</tr>
<tr class="alt">
<td>2021</td>
<td>4,171</td>
<td>33%</td>
</tr>
</tbody></table>
<p class="last-paragraph">*Cases where the audit is complete, and NRP has received the data.</p>
</div><!-- end "tab1" -->
<div class="tabs-content inactive" id="tab2">
<h2>Average Exam Class Percentage</h2>
<p>NRP uses several strata to ensure its data are a representative sample of all filed tax returns. One of the most useful is exam class, which categorizes taxpayers into 11 categories based on income level and the schedules filed on the return. The higher the exam class, the higher the income level, and usually, the more complicated the return.</p>
<dl class="bar_graph">
<dt id="exam270"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="EITC Present, TPI = less than $200,000, and Schedule C/F TGR less than $25,000 or EITC with no Schedule C/F" title="EITC Present, TPI = less than $200,000, and Schedule C/F TGR less than $25,000 or EITC with no Schedule C/F">16.4%</a></dt>
<dd>Exam Class 270</dd>
<dt id="exam271"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="EITC Present & TPI = less than $200,000 and Schedule C/F TGR more than $24,999" title="EITC Present & TPI = less than $200,000 and Schedule C/F TGR more than $24,999">1.9%</a></dt>
<dd>Exam Class 271</dd>
<dt id="exam272"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="TPI = less than $200,000, No Schedule C, E, F, or Form 2106" title="TPI = less than $200,000, No Schedule C, E, F, or Form 2106">15.6%</a></dt>
<dd>Exam Class 272</dd>
<dt id="exam273"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="TPI = less than $200,000 and Schedule E or Form 2106 but no Schedule C or F" title="TPI = less than $200,000 and Schedule E or Form 2106 but no Schedule C or F">9.9%</a></dt>
<dd>Exam Class 273</dd>
<dt id="exam274"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="Non-Farm Business with Schedule C/F TGR = less than $25,000 and TPI = less than $200,000" title="Non-Farm Business with Schedule C/F TGR = less than $25,000 and TPI = less than $200,000">9.5%</a></dt>
<dd>Exam Class 274</dd>
<dt id="exam275"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="Non-Farm Business with Schedule C/F TGR = $25,000, less than $99,999 and TPI = less than $200,000" title="Non-Farm Business with Schedule C/F TGR = $25,000, less than $99,999 and TPI = less than $200,000">5.8%</a></dt>
<dd>Exam Class 275</dd>
<dt id="exam276"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="Non-Farm Business with Schedule C/F TGR $100,000 - $199,999 and TPI = less than $200,000" title="Non-Farm Business with Schedule C/F TGR $100,000 - $199,999 and TPI = less than $200,000">4.7%</a></dt>
<dd>Exam Class 276</dd>
<dt id="exam277"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="Non-Farm Business with Schedule C/F TGR>$199,999 and TPI less than $200,000" title="Non-Farm Business with Schedule C/F TGR>$199,999 and TPI less than $200,000">4.6%</a></dt>
<dd>Exam Class 277</dd>
<dt id="exam278"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="Farm Business Not Classified Elsewhere and TPI = less than $200,000" title="Farm Business Not Classified Elsewhere and TPI = less than $200,000">6.7%</a></dt>
<dd>Exam Class 278</dd>
<dt id="exam279"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="No Schedule C or F and TPI > $199,999 less than $1 million" title="No Schedule C or F and TPI > $199,999 less than $1 million">10.3%</a></dt>
<dd>Exam Class 279</dd>
<dt id="exam280"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="Schedule C or F Present and TPI> $199,999 less than $1 million" title="Schedule C or F Present and TPI> $199,999 less than $1 million">6.0%</a></dt>
<dd>Exam Class 280</dd>
<dt id="exam281"><a href="https://nrp.web.irs.gov/1040-study.html#" alt="TPI > $999,999" title="TPI > $999,999">8.7%</a></dt>
<dd>Exam Class 281</dd>
</dl>
</div><!-- end "tab2" -->
<div class="tabs-content inactive" id="tab3">
<h2>NRP 1040 Audits</h2>
<p>NRP audits can be conducted several different ways. As shown in the table below, nearly 90% of NRP audits were completed by either a Revenue Agent (RA) or Tax Compliance Officer (TCO). The remaining audits were completed either through a Correspondence exam or were marked “Accepted as Filed” (AAF) or “Accepted with Adjustments” (AWA) during classification.</p>
<p>Full data tables for the NRP 1040 study can be found on the NRP section of CDW. The applicable tables each start with the prefix “NRP_1040.”</p>
<table>
<tbody><tr>
<th rowspan="2">Study Year</th>
<th colspan="4">Exam Type</th>
</tr>
<tr class="alt">
<th>RA</th>
<th>TCO</th>
<th>CORR</th>
<th>AAF/AWA</th>
</tr>
<tr>
<td>2006</td>
<td>60%</td>
<td>31%</td>
<td>2%</td>
<td>8%</td>
</tr>
<tr>
<td>2007</td>
<td>59%</td>
<td>30%</td>
<td>4%</td>
<td>8%</td>
</tr>
<tr>
<td>2008</td>
<td>59%</td>
<td>29%</td>
<td>7%</td>
<td>6%</td>
</tr>
<tr>
<td>2009</td>
<td>51%</td>
<td>35%</td>
<td>7%</td>
<td>6%</td>
</tr>
<tr>
<td>2010</td>
<td>53%</td>
<td>35%</td>
<td>5%</td>
<td>6%</td>
</tr>
<tr>
<td>2011</td>
<td>59%</td>
<td>30%</td>
<td>5%</td>
<td>6%</td>
</tr>
<tr>
<td>2012</td>
<td>69%</td>
<td>23%</td>
<td>3%</td>
<td>4%</td>
</tr>
<tr>
<td>2013</td>
<td>66%</td>
<td>25%</td>
<td>4%</td>
<td>5%</td>
</tr>
<tr>
<td>2014</td>
<td>67%</td>
<td>24%</td>
<td>4%</td>
<td>4%</td>
</tr>
<tr><td>2015</td>
<td>66%</td>
<td>25%</td>
<td>4%</td>
<td>5%</td>
</tr>
<tr><td>2016</td>
<td>58%</td>
<td>36%</td>
<td>4%</td>
<td>2%</td>
</tr>
<tr>
<td>2017</td>
<td>76%</td>
<td>16%</td>
<td>5%</td>
<td>3%</td>
</tr>
<tr class="alt">
<td>2018</td>
<td>73%</td>
<td>19%</td>
<td>4%</td>
<td>4%</td>
</tr>
<tr class="alt">
<td>2019</td>
<td>64%</td>
<td>30%</td>
<td>3%</td>
<td>3%</td>
</tr>
<tr class="alt">
<td>2020</td>
<td>54%</td>
<td>40%</td>
<td>2%</td>
<td>4%</td>
</tr>
<tr style="font-weight:800;">
<td>Average</td>
<td>62%</td>
<td>28%</td>
<td>4%</td>
<td>5%</td>
</tr>
</tbody></table>
<p class="last-paragraph">For 2006-2012, Exam Type is determined by BOD. For 2013 to 2018, Exam Type is determined by Classification Outcome.</p>
</div><!-- end "tab3" -->
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<p class="last-paragraph">More than 25 NRP 1040 audits have resulted in a balance due to the IRS of over $1 million.</p>
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