EconPapers    
Economics at your fingertips  
 

Delayed feedback on tax audits affects compliance and fairness perceptions

Christoph Kogler, Luigi Mittone and Erich Kirchler

Journal of Economic Behavior & Organization, 2016, vol. 124, issue C, 81-87

Abstract: In the present study we explore the conflicting finding that delayed feedback on tax audits apparently results in higher tax compliance, although delaying feedback is associated with lower perceptions of procedural fairness. In a repeated rounds design the timing of feedback (delayed vs. immediate) is investigated in combination with a reduction of wealth in some periods, presented either as a rather unfair intervention of the authorities, or due to a comparatively neutral manipulation. The results reveal a strong impact of timing of feedback on tax compliance: participants in conditions of delayed feedback show significantly higher compliance than those in conditions of immediate feedback. In addition, participants receiving delayed feedback are more likely to state that the probability of audit is high as well as that fines in case of detection are severe, but on the other hand perceive the timing of feedback and the authorities as more unfair. No main effect of the reason for the wealth reduction could be identified. The finding that the difference in compliance between delayed and immediate feedback on tax audits develops over time supports the assumption that in decisions based on experience the probabilities of rare events are underweighted, while in decisions based on descriptions people make choices as if they overweight probabilities of rare events.

Keywords: Tax compliance; Delayed feedback; Procedural justice; Audit probability; Tax morale (search for similar items in EconPapers)
JEL-codes: H26 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268115002814
Full text for ScienceDirect subscribers only

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:eee:jeborg:v:124:y:2016:i:c:p:81-87

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Neilson, William Stuart

More articles in Journal of Economic Behavior & Organization from Elsevier
Series data maintained by Dana Niculescu ().

 
Page updated 2017-11-13
Handle: RePEc:eee:jeborg:v:124:y:2016:i:c:p:81-87