Written Communications and Taxpayers' Compliance: An Interactional Fairness Perspective

Jonathan Farrar () and Linda Thorne ()
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Jonathan Farrar: School of Accounting and Finance, Ryerson University, Toronto
Linda Thorne: Schulich School of Business, York University, Toronto

Canadian Tax Journal, 2016, vol. 64, issue 2, 351-370

Abstract: Written communication is the primary means used by tax authorities to communicate with taxpayers. Prior research shows that the content of written communications by tax authorities can influence taxpayers' compliance by appealing to interactional fairness. Interactional fairness refers to the quality of treatment that individuals receive from an authority figure and has two dimensions, tone and information. In written communications from a tax authority, inadvertently or by design, both tone and information are conveyed. In our study, we examine the impact of both dimensions on taxpayers' compliance through an experiment involving 287 taxpayers. We find an interaction between tone and information, such that compliance is highest in the presence of high information and an authoritative tone. We also find that compliance is positively associated with information. Our findings have practical implications for tax authorities in determining how best to use written communications to encourage taxpayers' compliance.

Keywords: Communications; Compliance; fairness; psychological aspects; tax administration (search for similar items in EconPapers)
Date: 2016
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