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Reimagining Tax Administration: Social Programs Through the Tax Code – Workshop 3: Design Theory and Administrative Burden

Posted on Aug. 9, 2022

Today we continue our series giving an advance look at the Center for Taxpayer Rights’ Reimagining Tax Administration workshop briefs. An earlier post here explored the social safety net, including the role of refundable tax credits in lifting children out of poverty, and the characteristics of the population claiming the Earned Income Tax Credit (EITC) and Advance Child Tax Credit (CTC).

In the brief today, we explore the impact of program design and administrative burden on that population’s ability to understand and navigate application procedures and other bureaucratic apparatus, and how that apparatus might deter the targeted population from receiving benefits for which they are eligible.  We also learn about some interesting experiments in trying to communicate complex administrative requirements and legal issues to program beneficiaries.

All of the workshop sessions are recorded, and the videos are available here on the Center’s website, along with slide decks and other materials.

Administrative Burden: Policymaking by Other Means

Presented by Pamela Herd & Donald Moynihan, Professors, McCord School of Public Policy, Georgetown University

Administrative burdens occur when an individual’s experience with policy implementation is onerous. Administrative burden can occur in any context where the state regulates private behavior or structures access to services, and it can apply to either a consumer of government services or a government employee. Administrative burdens are distributive in that certain groups experience more benefits or burdens than others. In the context of the tax system, lower income groups often experience the most disadvantages. These burdens are also constructed, as they reflect the preferences of political actors and their constituents regarding policy. As the product of administrative or political choices, these burdens are often presented as technical fixes or aspects of broad concerns, such as reducing fraud. Note, however, that just as administrative burdens can be designed into a program, they can also be designed out.


Administrative burden reflects people’s experience of the state. That experience includes three categories of costs – learning, compliance, and psychological. Learning costs are the costs people face when searching for information about government-provided services. Compliance costs are those encountered when trying to comply with a program’s rules and regulations. Psychological costs are related to the stress, lack of autonomy, or stigma experienced when learning about a program or complying with its requirements.

The table below provides examples of each cost and how they operate in the context of the Advance Child Tax Credit (Advance CTC):


Learning Costs

Compliance Costs

Psychological Costs

Description & Examples:

– Engaging in the search process to collect information about public services, as this knowledge is not innate.
– Evaluating how services are relevant to the individual.
– Examples: learning a program exists, determining eligibility, considering the benefit, researching how to apply.

– Following administrative rules or requirements
– Examples: submitting forms, providing documentation, completing recertification process, hiring legal help.

– Stigma associated with applying for or participating in a program with negative perceptions.
– Loss of personal power or autonomy in interactions with the state.
– Stress of dealing with administrative processes or potential loss of benefit.

Advance CTC Context:

– Mitigated by automatic enrollment, via previously filed returns or nonfiler information provided through a portal, and outreach efforts.
– Information about enrollment not clear on IRS website.
– Significant portion of nonfiler population not familiar with tax system.
– Requires large outreach effort, which is not a core IRS skill.

– Low compliance costs for those automatically enrolled.
– Early versions of nonfiler portal not available in mobile-friendly version.
– Early versions of nonfiler portal not available in non-English languages.
– Limited ability to modify eligibility information via portal.
– Applications through nonfiler portal do not always result in receipt of credit, and no explanation provided or resources to remedy.

– Low psychological costs due to broad eligibility across income groups.
– No need to apply for the benefit in person.
– Benefit was provided in cash (rather than voucher or card).

These burdens will likely change as taxpayers are required to reconcile the Child Tax Credit and receive the remaining credit during the 2022 filing season. Individuals with limited or no experience with the tax system must file a return to receive the remainder of the credit, and easy to use filing portals will not be available until after April 15th. Measures instituted to protect against improper payments may raise impose significant administrative burden.  Additionally, the nature and extent of burdens in future years is still unclear, as the existence of the Advance Child Tax Credit is uncertain beyond the 2021 tax year. The addition of a work requirement will increase burden, both in terms of accessibility of the credit and the challenge of documenting work status.

Applying Behavioral Economics to Human services

Presented by Emily Schmitt, Office of Planning, Research, and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services

Administrative burdens can be mitigated or eliminated by applying modern understandings of human behavior to the administration of social services, including those administered by the IRS. Under traditional theories of human decision-making, consumers are treated as rational decision-makers who use all available information to make decisions that maximize their well-being. Under this approach, where the benefit outweighs the cost of applying or compliance with requirements, people will apply for the benefit.

However, behavioral economics and psychology have brought additional insights into how humans interact with systems and make decisions. These insights include the following observations, which can be applied to reduce administrative burden:

  • People can only pay attention to and understand a limited amount of information at a time;

  • People give more weight to the present than to the future;

  • People may place more importance on smaller factors, giving them an outsized influence;

  • People are influenced by how they see themselves and others; and

  • People are more motivated by loss than they are by gain.

In 2010 the Administration for Children and Families of the U.S. Department of Health and Human Services launched the Behavioral Interventions to Advance Self-Sufficiency (BIAS) initiative, to determine whether applying behavioral economics principles to programs under its purview can have a large impact with small, low cost changes. (In Fiscal Year 2021 ACF provided grants totaling $120 billion in 60 programs, including child care, Head Start, Temporary Assistance to Needy Families (TANF), refugee resettlement, and child support enforcement.)  Under the BIAS approach, human services should be redesigned based on the characteristics of decision-making using the following steps:

  1. Define: Identify problems of interest with a program or agency.

  2. Diagnose: Gather data, create a process map, identify drop-off points, and hypothesize bottlenecks.

  3. Design: Propose behavioral interventions to address these bottlenecks.

  4. Test: Ideally, conduct Rapid Cycle Evaluation using random assignment.

The BIAS portfolio applied this approach in three domains (work support, child support, and child care), seven states, and 15 tests.  In these tests the agency was trying to zoom in on specific places where people drop out of the application or recertification process and identify particular design interventions, mostly in the way agencies communicated with people.  Using this system, administrative burdens have been reduced by taking the following actions:

  • Simplifying messaging so it is more easily and quickly understood, including consolidating important information on the first page;

  • Including information about how people can plan how they will interact with the system, for example by providing information about how to get to a meeting via public transportation;

  • Adding personalization to materials, for example by adding sticky notes from case workers to agency letters;

  • Making deadlines and other important dates prominent; and

  • Experimenting with highlighting the potential loss or gain that comes with the consumer’s choices.

Through randomized tests and demonstration projects, BIAS identified very low cost and scalable small changes that improved program administration. In one such program, BIAS redesigned communication sent to New York City residents who may be eligible for an EITC-like payment. To receive the payment, residents were required to attend a meeting and provide information in the year before the payment was administered. To increase awareness of the payment and of the steps required to guarantee eligibility, BIAS designed a postcard and text messages sent to residents by the city. In the modified postcards, steps for eligibility were simplified and the information was condensed to make the process as simple and clear as possible for recipients. BIAS found that residents who received both the simplified postcard and the text message were more likely to attend the meeting required for eligibility. (For more information about “the power of prompts,” see the ACF report here.) For the next round of projects, ACF will focus on changing program and staff level processes and practices in small but important ways.  Ultimately, adapting messaging based on human behavior is low cost and increases participation in important social programs because consumers experience fewer burdens as they navigate the complex processes.

Case Study: Cancellation of debt self-help materials

Presented by Jim Greiner, Honorable S. William Green Professor of Public Law, Faculty Director, Access to Justice Lab, Harvard Law School

Experiments with materials distributed to taxpayers with cancelled debt illustrate the benefits – and the disadvantages – of designing benefit administration in accordance with the principles of behavioral economics. The goal of these experiments was to get people to show up to court to contest credit card debts.  The proceedings involve legal terms and procedures that can increase administrative burden. In this experiment, researchers designed educational materials intended to increase participation in administrative proceedings relating to cancelled debt. Drawing on adult education literature and techniques used by junk mail purveyors and working with the Access to Justice Lab, these materials relied heavily on cartoons and other images, and characters were designed to convey certain messages to the consumer.

For example, the taxpayer character, named Blob, is intended to be “everyperson” — raceless, genderless, and shapeless to remove any potential bias. The attorney character is designed to be friendly and inviting to encourage participants to seek legal help when self-help is not enough.

Although participation rates after publication of these materials are still low, the addition of these materials resulted in a tripling of the participation rate for these proceedings. Additionally, producing material like this is low-cost, and it proved beneficial where an individual might be hesitant to retain legal help or where legal assistance is not scalable. Especially where data sharing among agencies is limited (meaning individuals must participate more to provide information the agency does gather itself), more self-help materials are necessary to help individuals navigate complex procedures.

Although the benefits are clear, there remain some challenges to producing self-help materials like this. First, because the law and processes covered are so complex, the materials are quite lengthy (in the credit card sits, the paper-based self-help document was 91 pages long). Additionally, determining when self-help is not enough and an individual should seek legal help is problematic, as the benefits of self-help and of free legal assistance can vary based on the nature and extent of the proceeding.  One promising approach is that of blended self-help, such as that used by to help people get through the bankruptcy process.  This tool uses online guided interviews to gather information that will then be presented to a bankruptcy lawyer in the proper format to prepare documents for filing.


How the agency approaches its role as benefits administrator can have significant impact on administrative burden. For example, one state unemployment agency tried to make the claims filing and hearing process less burdensome by requiring the claims adjuster to obtain the employment file directly from the employer rather than requiring the claimant to submit it. In this way, the agency conducts its own discovery and the adjudicator asks questions. This approach to the proceeding is inquisitorial rather than adversarial, which reduces the learning, compliance, and psychological costs of the proceeding.

Further, interventions differ depending on one’s goal.  Is the goal to increase participation by 5 percent or to get to universal participation?  The latter goal may require policy simplification, or better collaboration by data-sharing between state and federal agencies or between federal agencies.  And where data-sharing doesn’t achieve the desired improvements, intensive outreach may be required – not just by the agency but on-the-ground third parties assisting individuals.  Further, the type of intervention depends on where you are in the policy process and also on the nature of the problem.  For example, information nudges work well where the key problem is learning costs.

To bring about changes in the organizational culture, which can result in larger scale reduction of administrative burden, agencies must be willing to experiment and work on institutionalizing these values by creating an ethic of experimentalism and continuous learning.  Nudging can be a gateway to cultural change – it shows how difficult it is for people to navigate existing processes and opens the door to systemic change.


In attempting to minimize administrative burden in programs that benefit low income and historically under-represented populations, policy makers and administrative agencies should consider the following design elements when making policy choices:

  • Design programs that incorporate automatic enrollment and default elections;

  • Incorporate data-sharing among state and federal agencies into program design to determine eligibility and further auto-enrollment, subject to necessary protections on use and disclosure of data;

  • Draft eligibility rules that are able to be expressed in non-legal common parlance and do not create barriers to participation by the eligible population;

  • Establish programs of on-the-ground personal assistance, including partnerships with stakeholders trusted by the eligible population;

  • Articulate explicitly the costs and benefits of improper payment/fraud detection protections, including the impact of these measures on the eligible population by deterring them from participating in the program.

  • Establish inquisitorial, non-adversarial dispute resolution processes; and

  • Establish an agency culture of experimentation and continuous learning that considers design and administrative burden at all stages of administration.

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