Estimating Tax Noncompliance with Evidence from Unaudited Tax Returns

Feldman, Naomi E.; Slemrod, Joel

doi:10.1111/j.1468-0297.2007.02020.x

Cited by 151 publications

(136 citation statements)

References 14 publications

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“…Arguing that this …nding re ‡ects underreporting of income rather than a higher propensity to consume food, they obtain an estimate of the size of the black economy. In a more recent paper, Feldman and Slemrod (2007) apply a similar methodology using di¤erences in charitable giving to identify the degree of underreporting.…”

Section: Introductionmentioning

confidence: 99%

Tax evasion and Swiss bank deposits

Johannesen

2014

Journal of Public Economics

107

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Bank deposits in jurisdictions with banking secrecy constitute an e¤ective tool to evade taxes on interest income. A recent EU reform reduces the scope for this type of tax evasion by introducing a source tax on interest income earned by EU residents in Switzerland and several other jurisdictions with banking secrecy. In this paper, we estimate the impact of the source tax on Swiss bank deposits held by EU residents while using that non-EU residents were not subject to the tax to apply a natural experiment methodology. We …nd that the 15% source tax caused Swiss bank deposits of EU residents to drop by more than 40% with most of the response occurring in two quarters immediately before and after the source tax was introduced. The estimates imply an elasticity of Swiss deposits with respect to the net-of-source-tax-rate in the range 2.5-3. Terms of use: Documents in

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Section: Introductionmentioning

confidence: 99%

Tax evasion and Swiss bank deposits

Johannesen

2014

Journal of Public Economics

107

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“…In the simulation the reported incomes of the self-employed are between 25 per cent and 35 per cent lower than the employed, and so …t reasonably well with this observation. The evidence also suggests that reported income of the self-employed must be in ‡ated by between around 29 per cent (Feldman and Slemrod, 2007), and 35 per cent (Pissarides and Weber, 1989) to account for under-reporting. It can be in ‡ated to take account of the personal consumption of business goods by a further 34 per cent (Bradbury, 1997).…”

Section: Baseline Simulationsmentioning

confidence: 99%

Predictive analytics and the targeting of audits

Hashimzade

Myles

Rablen

2016

Journal of Economic Behavior & Organization

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The literature on audit strategies has focused on random audits or on audits conditioned only on income declaration. In contrast, tax authorities employ the tools of predictive analytics to identify taxpayers for audit, with a range of variables used for conditioning. The paper explores the compliance and revenue consequences of the use of predictive analytics in an agent-based model that draws upon a behavioral approach to tax compliance. The taxpayers in the model form subjective beliefs about the probability of audit from social interaction, and are guided by a social custom that is developed from meeting other taxpayers. The belief and social custom feed into the occupational choice between employment and two forms of self-employment. It is shown that the use of predictive analytics yields a signi…cant increase in revenue over a random audit strategy.

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“…Finally, our work is related to empirical studies of misreporting in response to taxation, such as Carillo, Pomeranz, and Singhal (2017), Feldman and Slemrod (2007), and Gordon and Slemrod (2000).…”

Section: Francementioning

confidence: 99%

Tax Simplicity or Simplicity of Evasion? Evidence from Self-Employment Taxes in France

Aghion¹,

Akcigit²,

Lequien³

et al. 2017

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We study the effects of fiscal incentives for self-employment using new French tax data from 1994 to 2012. France serves as a good quasi-laboratory: It has three fiscal regimes -or modes of taxation -for the self-employed, which differ in their financial payoffs and in their administrative simplicity. These regimes have changed extensively over time -offering the opportunity to study how people learn about them and understand them. We find that the self-employed respond to the tax and administrative notches created by the eligibility thresholds: there is strong bunching right before the eligibility thresholds, which we use to estimate self-employed taxable income elasticities and the value of administrative simplicity. Even a small preference for administrative simplicity could explain the bunching observed. There is a sizable cost of tax complexity; agents are not immediately able to understand what the right regime choice is and there is evidence for costly learning over time. The cost of complexity is regressive because it affects mostly the uneducated, low income, and low skill agents. Agents who can be viewed as more informed and knowledgeable (e.g., the more educated or high-skilled) are more likely to make the correct regime choice and to learn faster.

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Estimating Tax Noncompliance with Evidence from Unaudited Tax Returns

Cited by 151 publications

References 14 publications

Tax evasion and Swiss bank deposits

Tax evasion and Swiss bank deposits

Predictive analytics and the targeting of audits

Tax Simplicity or Simplicity of Evasion? Evidence from Self-Employment Taxes in France

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