This paper analyzes a randomized tax enforcement experiment in Denmark. In the base year, a stratified and representative sample of over 40,000 individual income tax filers was selected for the experiment. Half of the tax filers were randomly selected to be thoroughly audited, while the rest were deliberately not audited. The following year, "threat-of-audit" letters were randomly assigned and sent to tax filers in both groups. Using comprehensive administrative tax data, we present four main findings. First, we find that the tax evasion rate is very small (0.3%) for income subject to third-party reporting, but substantial (37%) for self-reported income. Since 95% of all income is third-party reported, the overall evasion rate is very modest. Second, using bunching evidence around large and salient kink points of the nonlinear income tax schedule, we find that marginal tax rates have a positive impact on tax evasion, but that this effect is small in comparison to avoidance responses. Third, we find that prior audits substantially increase self-reported income, implying that individuals update their beliefs about detection probability based on experiencing an audit. Fourth, threat-of-audit letters also have a significant effect on self-reported income, and the size of this effect depends positively on the audit probability expressed in the letter. All these empirical results can be explained by extending the standard model of (rational) tax evasion to allow for the key distinction between self-reported and third-party reported incomes.

This paper analyzes a tax enforcement field experiment in Denmark. In the base year, a stratified and representative sample of over 40,000 individual income tax filers was selected for the experiment. Half of the tax filers were randomly selected to be thoroughly audited, while the rest were deliberately not audited. The following year, threat‐of‐audit letters were randomly assigned and sent to tax filers in both groups. We present three main empirical findings. First, using baseline audit data, we find that the tax evasion rate is close to zero for income subject to third‐party reporting, but substantial for self‐reported income. Since most income is subject to third‐party reporting, the overall evasion rate is modest. Second, using quasi‐experimental variation created by large kinks in the income tax schedule, we find that marginal tax rates have a positive impact on tax evasion for self‐reported income, but that this effect is small in comparison to legal avoidance and behavioral responses. Third, using the randomization of enforcement, we find that prior audits and threat‐of‐audit letters have significant effects on self‐reported income, but no effect on third‐party reported income. All these empirical results can be explained by extending the standard model of (rational) tax evasion to allow for the key distinction between self‐reported and third‐party reported income.

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Background: Piperacillin is a central drug in the treatment of Pseudomonas aeruginosa spondylodiscitis. Intermittent short-term infusion (STI) remains standard treatment in most centres, although the application of continuous infusion (CI) has shown promising results in other clinical settings. We aimed to evaluate time above the minimal inhibitory concentration (fT > MIC) of the free fraction of piperacillin in steady state conditions in porcine cervical spine tissue following CI and STI using microdialysis with MIC targets of 4, 8, and 16 μg/mL. Methods: 16 female pigs were randomized to receive piperacillin/tazobactam as STI (4/0.5 g every 6 h) or CI (4/0.5 g as a bolus followed by 12/1.5 g) for 18 h. Microdialysis catheters were placed for sampling of piperacillin concentrations from the intervertebral disc, vertebral cancellous bone, paravertebral muscle, and adjacent subcutaneous tissue during the third dosing interval (12–18 h). Blood samples were collected as reference. Results: CI resulted in fT > MIC > 82% across all compartments and targets, except for intervertebral disc (37%) and vertebral cancellous bone (28%) at MIC = 16 μg/mL. In Group STI, >72% fT > MIC was reached for MIC = 4 μg/mL in all investigated compartments, while for MIC = 16 μg/mL only subcutaneous tissue exhibited fT > MIC > 50%. Conclusion: CI of piperacillin resulted in higher fT > MIC compared to STI infusion across the investigated tissues and targets. CI should therefore be considered in spondylodiscitis cases requiring piperacillin treatment.