Tax Compliance: An Investigation Using Individual TCMP Data / Helen V. Tauchen, Ann Dryden Witte, Kurt J. Beron.

Format:

Book

Author/Creator:

Tauchen, Helen V.

Contributor:

National Bureau of Economic Research.

Witte, Ann Dryden.

Beron, Kurt J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3078.

NBER working paper series no. w3078

Language:

English

Subjects (All):

Taxpayer compliance.

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Tax Compliance

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1989.

Cambridge, Mass : National Bureau of Economic Research, 1989.

Summary:

In this paper, we analyze the tax compliance behavior of US taxpayers by using a 1979 data set that combines information from a random sample of individual tax returns each of which has been thoroughly audited, IRS administrative records, and sociodemographic data from the Census. We find evidence that both audits and tax code provisions affect compliance. However, the effects are significant for only the low and high income groups. Interestingly, previous research has shown that these groups also participate most actively in underground economic activities, the income from which is not reported on any tax returns. Our results for audits suggest that the "ripple" or general deterrent effect of audits may be many times larger than the direct revenue yield of audits for high income taxpayers. Our results for allowable subtractions from income imply that the 1986 Tax Reform Act changes to lower allowable subtractions may have procompliance effects.

Notes:

Print version record

August 1989.