Sample statistics as convincing evidence: A tax fraud case

Jostein Lillestøl

No 2018/12, Discussion Papers from Norwegian School of Economics, Department of Business and Management Science

Abstract: This report deals with the analysis of data used by tax officers to support their claim of tax fraud at a pizzeria. The possibilities of embezzlement under study are overreporting of take-away sales and underreporting of cash payments. Several modelling approaches are explored, ranging from simple well-known methods to presumably more precise tools. More specifically, we contrast common methods based on normal assumptions and models based on Gamma-assumptions. For the latter, both maximum likelihood and Bayesian approaches are covered. Several criteria for the choice of method in practice are discussed, among them, how easy the method is to understand, justify and communicate to the parties. Some dilemmas present itself: the choice of statistical method, its role in building the evidence, the choice of risk factor, the application of legal principles like “clear and convincing evidence” and “beyond reasonable doubt”. The insights gained may be useful for both tax officers and defenders of the taxpayer, as well as for expert witnesses.

Keywords: Gamma-Beta analysis; Bayesian Gamma-analysis; Risk analysis (search for similar items in EconPapers)
JEL-codes: C00 C10 C11 C13 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2018-09-25
New Economics Papers: this item is included in nep-ecm and nep-iue
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/11250/2564537 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:nhhfms:2018_012

Access Statistics for this paper

More papers in Discussion Papers from Norwegian School of Economics, Department of Business and Management Science NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by Stein Fossen ().