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Getting the word out: Enforcement information dissemination and compliance behavior

Author Info

Listed author(s):
  • Alm, James
  • Jackson, Betty R.
  • McKee, Michael

Abstract

The question for the tax authority is how individuals become aware of enforcement effort. To be an effective tool in reducing tax evasion taxpayers must be aware of the current audit and penalty regime. We use laboratory experiments to examine the compliance impact of types of information dissemination regarding audit frequency and results. The information includes "official" information disseminated by the tax authority, and "unofficial", or informal, communications among taxpayers. Our results indicate that the effect of the type of post-audit information is conditional on whether the taxpayer is well informed of the audit rate prior to filing. We find that the tax authority would be served by pre-announcing audit rates credibly and by emphasizing the previous period audit frequency in annual reporting of enforcement effort.

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File URL: http://www.sciencedirect.com/science/article/pii/S0047-2727(08)00166-7
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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 93 (2009)
Issue (Month): 3-4 (April)
Pages: 392-402

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Handle: RePEc:eee:pubeco:v:93:y:2009:i:3-4:p:392-402
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

Keywords: Tax compliance Tax audits Social norms;

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  16. Alm, James & Jackson, Betty & McKee, Michael, 1992. "Institutional Uncertainty and Taxpayer Compliance," American Economic Review, American Economic Association, vol. 82(4), pages 1018-1026, September.
  17. Dubin, Jeffrey A. & Graetz, Michael J. & Wilde, Louis L., 1990. "The Effect of Audit Rates on the Federal Individual Income Tax, 1977-1986," National Tax Journal, National Tax Association, vol. 43(4), pages 395-409, December.
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