The United States has a federal income tax system that relies significantly on the honesty of its taxpayers in that the Internal Revenue Service (IRS) can't audit everyone who files a tax return. In fact, the IRS has conducted as few as 1.3 million audits in a given year. On the other hand, many studies show that the average citizen substantially complies with the tax code.

a. How does the IRS attain such a high rate of compliance from the U.S. taxpayer while auditing so few returns?

b. What strategies do you think the IRS employs to maximize the return to its auditing effort?