Deterrence vs. gamesmanship: Taxpayer response to targeted audits and endogenous penalties

Phillips, Mark D.

doi:10.1016/j.jebo.2014.01.018

Cited by 13 publications

(6 citation statements)

References 25 publications

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“…Empirical evidence supports this claim: evasion is lower when third-party reporting is present (Slemrod, 2007;Kleven et al, 2011). Finally, taxpayers may be aware that enforcement is not random, and that their own actions or characteristics may increase the likelihood they will suffer action; these endogeneities can provide sufficient incentives to comply even when the enforcement parameter levels are low (Phillips, 2014).…”

Section: Theoretical Approachesmentioning

confidence: 94%

The use of field experiments to increase tax compliance

Hallsworth¹

2014

Oxford Review of Economic Policy

166

130

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Governments have become increasingly interested in the 'explosion' of research into taxpayer behaviour. This article briefly reviews two main theories of tax compliance ('deterrence' and 'non-deterrence'), before discussing the recent rapid rise of natural field experiments (NFEs) in this area. These NFEs represent a 'win-win' for policy-makers and academics, since they can test theories while also evaluating the impact of a specific intervention in the real world. The evidence from NFEs shows that deterrence approaches improve compliance, while the case for non-deterrence approaches is less conclusive at the moment. NFEs could be improved by paying more attention to findings from behavioural science that apparently incidental factors, such as timing, framing, and complexity, substantially affect whether compliance occurs or not. New directions for future studies include: network effects, tax payments (in addition to declarations), the behaviour of firms, the provision of public goods, and the relationship between attitudes and behaviour.

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Section: Theoretical Approachesmentioning

confidence: 94%

The use of field experiments to increase tax compliance

Hallsworth¹

2014

Oxford Review of Economic Policy

166

130

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“…Underlying this argument is the fact that high unmatched income taxpayers face audit and detection rates that generally increase even with marginal increases in noncompliance, not just at the discrete point where the taxpayer has underreported 100 percent of unmatched income and begins underreporting matched income. Phillips (2014) describes the myriad ways in which U.S. audit selection, examination, and penalization processes lead to audit probabilities and payment rates (conditional upon audit) that are endogenous with respect to the amount of underreported income. High unmatched income taxpayers are unable to underreport fully without raising audit and payment rates, and Phillips (2014) also predicts that they will be less willing to do so.…”

Section: Literature On Information Reportingmentioning

confidence: 99%

Individual Income Tax Compliance and Information Reporting: What Do the U.S. Data Show?

Phillips¹

2014

National Tax Journal

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This paper examines 2001 National Research Program data to assess the role of information reporting in explaining individual income tax compliance in the United States. Taxpayers are largely compliant in self-reporting third-party "matched" income; furthermore, many taxpayers underreport 100 percent of "unmatched" income. However a majority of noncompliant taxpayers, particularly those with large amounts of unmatched income, underreport only a portion of it. Taxpayers exhibit signifcant heterogeneity with regard to the critical amount of unmatched income at which they switch from full to partial noncompliance. The increase in underreported income that arises from a marginal increase in unmatched income also varies across taxpayers.

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“…Bahkan, pemenuhan kewajiban pajak secara formil yang belum menguji aspek materinya masih rendah dari potensi yang ada. Kepatuhan pajak formil maksimal hanya sebesar 50% dari seluruh pemilik Nomor Pokok Wajib Pajak (NPWP) (Salbador, Anderson, Raabe, & Schadewald, 2015;Phillps, 2014;Spencer & Chambers, 2012). Banyaknya WNI yang menempatkan dananya di luar negeri sehingga tidak terjaring dalam sistem perpajakan nasional merupakan cerminan dari rendahnya kepatuhan pajak.…”

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Yadnya sebagai Pemaknaan Lain atas Nilai Wajar Harta Amnesti Pajak

Darmayasa¹

2017

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Deterrence vs. gamesmanship: Taxpayer response to targeted audits and endogenous penalties

Cited by 13 publications

References 25 publications

The use of field experiments to increase tax compliance

The use of field experiments to increase tax compliance

Individual Income Tax Compliance and Information Reporting: What Do the U.S. Data Show?

Yadnya sebagai Pemaknaan Lain atas Nilai Wajar Harta Amnesti Pajak

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