The use of third-party information reporting for tax deductions: evidence and implications from charitable deductions in Denmark

Gillitzer, Christian; Skov, Peer Ebbesen

doi:10.1093/oep/gpx055

Cited by 43 publications

(30 citation statements)

References 5 publications

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“…A more likely explanation is that some taxpayers do not bother reporting all of their charitable donations even when compliance requirements are low. This is consistent with the findings of Gillitzer and Skov (2018), who document that the introduction of pre-populated forms significantly increased the claims of small charitable donations. Both explanations imply that the estimated counterfactual represents an upper bound on donations that would have been reported in 1984 if individuals had not been required to write a statement and could not cheat.…”

Section: Empirical Results: Identifying Evasionsupporting

confidence: 91%

“…Within these literatures, several recent papers investigate how charitable giving specifically responds to changes in tax-compliance requirements. Gillitzer and Skov (2018) show that the use of pre-filled forms in Denmark led to a large increase in the number of reported charitable deductions, despite concurrently introducing third-party reporting. Surprisingly, the authors do not find a decrease in the number of large donations, suggesting that over-reporting prior to the reform was small.…”

Section: Introductionmentioning

confidence: 97%

See 1 more Smart Citation

Reducing evasion through self-reporting: Evidence from charitable contributions

Tazhitdinova

2018

Journal of Public Economics

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Section: Empirical Results: Identifying Evasionsupporting

confidence: 91%

Section: Introductionmentioning

confidence: 97%

Reducing evasion through self-reporting: Evidence from charitable contributions

Tazhitdinova

2018

Journal of Public Economics

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“…Note that the nudges we study are arguably the most common types of behavioral interventions, but governments can nudge in other ways too. For example, policies that publicly recognize the top taxpayers and shame the tax delinquents, as studied by Slemrod et al (2019) and Dwenger and Treber (2018), or ones that use third-party information reports to pre-fill tax returns, as studied by Fochmann et al (2018), Gillitzer and Skov (2018), Kotakorpi and Laamanen (2016), might as well be considered as nudges in a broader sense of the word.…”

Section: Discussionmentioning

confidence: 99%

Nudging for Tax Compliance: A Meta-Analysis

Antinyan

Asatryan

2019

SSRN Journal

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Taxpayer nudges-behavioral interventions that aim to increase tax compliance without changing the underlying economic incentives of taxpayers-are used increasingly by governments because of their potential cost-effectiveness in raising tax revenue. We collect about a thousand treatment effect estimates from over 40 randomized controlled trials, and in a meta-analytical framework show that non-deterrence nudges-interventions pointing to elements of individual tax morale-are on average ineffective in curbing tax evasion, while deterrence nudges-interventions emphasizing traditional determinants of compliance such as audit probabilities and penalty rates-are potent catalysts of compliance. These effects are, however, fairly small in magnitude. Deterrence nudges increase the probability of compliance by only 1.5-2.5 percentage points more than non-deterrence nudges, while the effects are likely to be bound to the short-run, and are somewhat inflated by selective reporting of results.

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“…(Wilhelm 2006(Wilhelm , 2007 contends that the data collected in the COPPS module are of better quality than most household giving survey data given the experience of the PSID staff. Recent work in Gillitzer and Skov (2017) suggests that it is in tax data that the measurement error might be found, not survey data. Moreover, the measurement error that might be of concern is in donations.…”

Section: Data Description Specification Of the Tax-price Of Giving Amentioning

confidence: 99%

How sensitive is the average taxpayer to changes in the tax-price of giving?

Backus

Grant

2018

Int Tax Public Finance

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There is a substantial literature estimating the responsiveness of charitable donations to tax incentives for giving in the USA. One approach estimates the price elasticity of giving based on tax return data of individuals who itemize their deductions, a group substantially wealthier than the average taxpayer. Another estimates the price elasticity for the average taxpayer based on general population survey data. Broadly, results from both arms of the literature present a counterintuitive conclusion: the price elasticity of donations of the average taxpayer is larger than that of the average, wealthier, itemizer. We provide theoretical and empirical evidence that this conclusion results from a heretofore unrecognized downward bias in the estimator of the price elasticity of giving when non-itemizers are included in the estimation sample (generally with survey data). An intuitive modification to the standard model used in the literature is shown to yield a consistent and more efficient estimator of the price elasticity for the average taxpayer under a testable restriction. Strong empirical support is found for this restriction, and we estimate a bias in the price elasticity around − 1, suggesting the existing literature significantly over-estimates (in absolute value) the price elasticity of giving. Our results provide evidence of an inelastic price elasticity for the average taxpayer, with a statistically significant and elastic price response found only for households in the top decile of income.

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The use of third-party information reporting for tax deductions: evidence and implications from charitable deductions in Denmark

Cited by 43 publications

References 5 publications

Reducing evasion through self-reporting: Evidence from charitable contributions

Reducing evasion through self-reporting: Evidence from charitable contributions

Nudging for Tax Compliance: A Meta-Analysis

How sensitive is the average taxpayer to changes in the tax-price of giving?

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