Settlement in Tax Evasion Prosecution

Ines Macho-Stadler and David Perez-Castrillo

No 814, CESifo Working Paper Series from CESifo

Abstract: It is often argued that even if optimal ex-post, settlement dilutes deterrence ex-ante. We analyze the interest for the tax authority of committing, ex-ante, to a settlement strategy. We show that to commit to the use of settlements is ex-ante optimal when the tax authority receives signals that provide statistical information about the taxpayers’ true tax liability. The more informative the signal, the larger the additional expected revenue raised by the tax authority when using settlement as a policy tool.

Keywords: enforcement of the law; settlement; tax evasion (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (5)

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Working Paper: Settlement in Tax Evasion Prosecution (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_814

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