The deterrence effect of real-world operational tax audits

Gabriele Mazzolini, Laura Pagani and Alessandro Santoro

No 359, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: We use a large administrative tax-returns panel dataset merged with tax audit database to estimate the effect of real-world operational tax audits on subsequent tax behavior. Our identification strategy and the institutional setting that we consider enable us to address potential endogeneity related to non-random selection of taxpayers to be audited. We find a positive and lasting effect of audits on subsequent reported income. However, in line with theoretical predictions, taxpayers do not increase tax compliance when the tax authority does not assess a positive additional income. Our results are robust to a variety of specifications and samples.

Keywords: Tax Compliance; Administrative Panel Data; Tax Audits (search for similar items in EconPapers)
JEL-codes: C23 C55 H26 (search for similar items in EconPapers)
Pages: 51
Date: 2017-02-03, Revised 2017-02-03
New Economics Papers: this item is included in nep-acc, nep-iue, nep-law, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://repec.dems.unimib.it/repec/pdf/mibwpaper359.pdf (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:mib:wpaper:359

Access Statistics for this paper

More papers in Working Papers from University of Milano-Bicocca, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Matteo Pelagatti ().