The indirect effects of auditing taxpayers

Marisa Ratto, Richard Thomas and David Ulph
Additional contact information
Richard Thomas: autre - AUTRES
David Ulph: autre - AUTRES

Post-Print from HAL

Abstract: In this paper we focus on the effects of investigations on tax compliance. Results from empirical studies suggest that the effects of audits are not only in terms of recovered unpaid tax (direct effects), but there are also indirect effects in terms of future better compliance in the rest of the community. The evidence suggests that such indirect effects tend to outweigh the direct effect. However, current policy decisions of how to allocate investigation resources across different groups of taxpayers generally neglect the indirect effects, generating a potential resource misallocation issue. With the aim to clarify a possible mechanism through which the indirect effects work and hence to inform any policy recommendations, we model tax compliance as a social norm and decompose the total effect of an increase in the audit probability into a direct effect (increased expected fine) and a multiplier effect due to taxpayers' interdependencies.

Keywords: optimal audit rule; tax evasion; social norm; opportunities to evade (search for similar items in EconPapers)
Date: 2013-05
Note: View the original document on HAL open archive server: https://hal.science/hal-01651143v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Public Finance Review, 2013, 41 (3), pp.30. ⟨10.1177/1091142112448414⟩

Downloads: (external link)
https://hal.science/hal-01651143v1/document (application/pdf)

Related works:
Journal Article: The Indirect Effects of Auditing Taxpayers (2013)
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:hal:journl:hal-01651143

DOI: 10.1177/1091142112448414

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().