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New Technologies and the Evolution of Tax Compliance

Author

Listed:
  • James Alm

    (Tulane Economics)

  • Joyce Beebe

    (Rice University)

  • Michael S. Kirsch

    (Notre Dame Law School)

  • Omri Marian

    (University of California, Irvine)

  • Jay A. Soled

    (Rutgers University)

Abstract

Improving tax compliance is a common goal of governments worldwide. The United States is no exception. The size of the nation’s “tax gap” — or the difference between what taxpayers pay in taxes in a timely manner and what they should pay if they fully complied with the tax laws — is hundreds of billions of dollars annually, significantly depriving the nation of much-needed revenue. This paper explores the mixed effects of technological advancements on tax compliance — and, thus, its counterpart, tax noncompliance. On the one hand, technological advances have largely eradicated many of the commonplace tax-noncompliance techniques that once reigned during the twentieth century. On the other hand, many of these very same technological advances threaten to usher in new modes of tax evasion. Which of these emergent trends will dominate is unclear. The outcome will largely depend upon whether Congress updates the tax laws to address technological advances and grants sufficient funding to the Internal Revenue Service to maintain robust enforcement efforts in an ever-changing technological landscape. Failure to take these steps will destine the size of the tax gap to expand. Many prior studies have addressed discreet effects of specific technologies on tax compliance. This paper contributes to this developing literature by offering a cohesive framework to address technological advancement and tax compliance.

Suggested Citation

  • James Alm & Joyce Beebe & Michael S. Kirsch & Omri Marian & Jay A. Soled, 2020. "New Technologies and the Evolution of Tax Compliance," Working Papers 2009, Tulane University, Department of Economics.
  • Handle: RePEc:tul:wpaper:2009
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    File URL: http://repec.tulane.edu/RePEc/pdf/tul2009.pdf
    File Function: First Version, September 2020
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    Citations

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    Cited by:

    1. James Alm, 2021. "Tax evasion, technology, and inequality," Economics of Governance, Springer, vol. 22(4), pages 321-343, December.
    2. James Alm & Peter Gerbrands & Erich Kirchler, 2022. "Using “responsive regulation” to reduce tax base erosion," Regulation & Governance, John Wiley & Sons, vol. 16(3), pages 738-759, July.
    3. Oksana N. Harkushenko, 2022. "Prospects of VAT Administration Improvement in Digitalized World: Analytical Review," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 8(1), pages 6-24.
    4. Pierre Genest & Léo Trespeuch, 2022. "Internet users’ perception about the impact of the pandemic on sports sponsorship [La perception des internautes face à l'impact de la pandémie sur le mécénat sportif]," Working Papers hal-03945701, HAL.
    5. James Alm, 2024. "Do We Have The Tools For Achieving Distributive Tax Justice?," Working Papers 2403, Tulane University, Department of Economics.
    6. repec:tul:wpaper:2306 is not listed on IDEAS
    7. Avi-Yonah, Reuven, 2023. "Comment on Cong et al., “Tax loss harvesting with cryptocurrencies”," Journal of Accounting and Economics, Elsevier, vol. 76(2).

    More about this item

    Keywords

    Technology; Tax compliance; Tax gap.;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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