Final answer:
The IRS's tax reporting requirements are not specifically mentioned for a denominator-level capacity concept, but they focus on taxes being equitable, simple, and efficient to ensure taxpayer understanding and compliance.
Step-by-step explanation:
The IRS's requirement for tax reporting concerning a denominator-level capacity concept is not explicitly defined in the question. However, when addressing tax requirements and principles, the IRS emphasizes that taxes should adhere to three main principles: they must be equitable, simple, and efficient. These criteria are critical in ensuring that taxpayers understand the necessity of taxes and are more inclined to comply.
On the topic of equity in tax requirements, the IRS aims to balance the fiscal impact, attempting to provide benefits (primarily stemming from reductions in spending) to lower-income tax filing units. Conversely, to potentially increase deficits (primarily due to reductions in taxes), these benefits are shifted towards higher-income tax filing units. This balancing act aims to maintain fairness in the tax system.