Gains of collaborative management in a federal state: the case of tax administration in the USA

Abstract

The federal state such as the United States of America offers many opportunities for collaborative management. The paper focuses on cooperation between federal and state agencies responsible for administration of taxes. The cornerstone of such cooperation is an active exchange of information between federal and state tax authorities. By adopting the tax structure in all relevant ways close to federal income tax structure, states may benefit from audit and other taxpayer return information generated by the federal government. The paper examines the federal-state cooperation in tax administration through the lens of several critical contingencies that determine the type of inter-organizational relationships. Although there’s a recent tendency to make the program a two-way street, benefits of cooperation accrue largely to the states.