Rewards and Fear of Being Labeled as Racist: A Tax Fraud Whistleblowing Investigation*

Abstract

This article investigates experimentally, in the income tax context, how whistleblowing intentions are influenced when a tax fraud perpetrator is of a different race than a potential whistleblower. In particular, it examines the impact of a message highlighting the social value of whistleblowing and how fear of being perceived as racist influences whistleblowing decision-making. Using insights from the fear elicitation and processing literature, we find that a potential whistleblower from a majority racial group who learns about a fraud perpetrated by someone from a minority racial group is significantly more likely to blow the whistle anonymously when a social value message is present versus absent, as the presence of a social value message reduces fear of being perceived as racist. However, we do not find that race dissimilarity is significantly associated with non-anonymous whistleblowing intentions, irrespective of the presence of a social value message. Furthermore, in nonanonymous whistleblowing situations, potential whistleblowers have to disclose their identities to the tax authority to become eligible for a cash reward. Even when potential whistleblowers can choose the amount of a cash reward they would have to be paid in order to blow the whistle, our results show that whistleblowing intentions do not increase significantly when perpetrators and potential whistleblowers are of different races. Overall, our results suggest that the societal value of tax whistleblowing and the use of cash rewards for whistleblowing are limited by other sociological considerations.

Mekanisme Pencegahan Fraud dalam Peningkatan Kinerja Organisasi

“…Para pelaku tindak kecurangan ini tidak hanya terbatas pada golongan tertentu saja, namun pada tiap lapisan dalam organinsasipun dapat ditemukan. Hal ini mengindikasikan bahwa diperlukan kepedulian untuk mencegah terjadainya tindakan kecurangan (Anandya & Werastuti, 2020;Dhaliwal et al, 2022;Rusdianti et al, 2021;Shonhadji & Maulidi, 2021) Kecurangan dalam suatu organisasi merupakan risiko yang dapat dicegah. Fenomena ini tidak bisa sepenuhnya dihilangkan, tetapi bisa diminimalkan.…”