But widespread reforms to improve service and prevent enforcement abuses have created a new problem for the tax collection agency. Increasingly, taxpayers believe the IRS is a pushover.

About 17 percent of Americans think it's acceptable to cheat on their taxes, up from 11 percent five years ago. Corporate tax shelters have cost the government billions of dollars.

USA Today talked with Everson, who has been on the job 10 months, about his efforts to rebuild the agency's muscles without shrinking its heart.

Q. You've said you want to focus enforcement efforts on high-income taxpayers and abusive corporate tax shelters. What about middle-class Americans who cheat on their taxes? Are they off the hook?

A. We are going to pay attention to all segments of the taxpaying public. The average American pays his or her taxes, but needs to be confident that ... his or her neighbor or competitors pay as well. Otherwise, they are disadvantaged, either competitively in a business sense, or in the long term because they're going to have to pay more. This is a central concern, and we will work in all segments of the taxpaying public to increase our attention on the need for compliance.

That having been said, we are paying particular attention to corporations and high-income individuals. Again, it relies on the perception of fairness. ... That chunk of the population that has more is certainly accountable for paying their fair share, and shouldn't be afforded an opportunity simply because they have more resources to game the system through sophisticated shelters or other international transactions. We need absolute integrity so there's confidence in the rest of the system.

The stakes here are really quite dramatic. We estimate there is very roughly an annual tax gap of something approximately a quarter of a trillion dollars a year. The combination of underreporting, nonfiling and nonpayment of balances owed is $200 (billion) to $300 billion (a year). There's a real opportunity in this period of deficits and fiscal concern to recoup dollars back into the Treasury that are out there in this tax gap.

In just a four-year period, to go from 11 percent to 17 percent of the population that thinks it's OK to cheat on their taxes — this trend threatens the government's ability to fund its future revenue stream, and it also threatens the basic rule of law.

Q. Some studies suggest a taxpayer is more likely to be hit by lightning while cashing in a lottery ticket than audited by the IRS. Does that mean dishonest taxpayers are less likely to get caught?

A. The audits themselves may have declined, but there are a lot of other things being done with matching information, that — while not technically categorized as audits in our statistics — certainly provide information to us. (They) generate a notice and questions to taxpayers... that very much increases compliance. That's across a big chunk of the taxpaying public.

Where we have issues (is with) somebody who has a million dollars of income, they've got 10 different investment partnerships. Unraveling all that is a complex undertaking. That's why we're putting more money into that area. You don't have the same traditional tools as with the average taxpayer, who is drawing a salary and working for the post office.

Q. It appears some accounting firms that created tax shelters for their clients viewed IRS penalties as a cost of doing business. Do penalties need to be increased?

A. I do think it's shocking that it does appear, in some instances, people viewed penalties as a cost of doing business. When I started out almost 30 years ago (in the accounting industry), you adhered to the law whether there was some great penalty or not. You didn't want to run the risk to your business reputation. This administration has proposed significant increases in penalties. Penalties do need to be increased. It's imperative we restore confidence in the integrity of tax professionals.

Q. Your predecessor, Charles Rossotti, set a goal of receiving 80 percent of tax returns through electronic filing by 2007. Last year, only about 40 percent of taxpayers e-filed. Do you think that goal was too ambitious?