Voluntary Disclosure of Evaded Taxes - Increasing Revenues, or Increasing Incentives to Evade?

Dominika Langenmayr

Discussion Papers in Economics from University of Munich, Department of Economics

Abstract: Many countries apply lower fines to tax evading individuals when they voluntarily disclose the tax evasion they committed. I model such voluntary disclosure mechanisms theoretically and show that while such mechanisms increase the incentive to evade taxes, they nevertheless increase tax revenues net of administrative costs. I then test the effects of voluntary disclosure in two separate empirical analyses. First, I confirm that voluntary disclosure mechanisms increase tax evasion, using the introduction of the 2009 offshore voluntary disclosure program in the U.S. for identification. Second, I quantify the tax revenues of voluntary disclosures by considering how some state-level governments in Germany bought whistle-blower data from foreign bank employees, thereby increasing the detection probability and the usage of voluntary disclosures.

Keywords: Tax evasion; voluntary disclosure; self-reporting (search for similar items in EconPapers)
JEL-codes: H24 H26 K42 (search for similar items in EconPapers)
Date: 2014-08-12
New Economics Papers: this item is included in nep-iue, nep-law and nep-pbe
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https://epub.ub.uni-muenchen.de/21359/7/Langenmayr.pdf (application/pdf)

Related works:
Chapter: Voluntary Disclosure of Evaded Taxes—Increasing Revenue, or Increasing Incentives to Evade? (2017)
Journal Article: Voluntary disclosure of evaded taxes — Increasing revenue, or increasing incentives to evade? (2017)
Working Paper: Voluntary Disclosure of Evaded Taxes - Increasing Revenues, or Increasing Incentives to Evade? (2015)
Working Paper: Voluntary disclosure of evaded taxes - Increasing revenue, or increasing incentives to evade? (2015)
Working Paper: Voluntary Disclosure of Evaded Taxes - Increasing Revenues, or Increasing Incentives to Evade? (2015)
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