Do Collateral Sanctions Work? Evidence from the IRS’ Passport Certification and Revocation Process

Paul R. Organ, Alex Ruda, Joel Slemrod and Alex Turk

No 29029, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Penalties for tax evasion are typically financial, but many jurisdictions also utilize collateral sanctions that deny access to some government-provided service. To learn about the effectiveness of such penalties, we examine a U.S. policy restricting passport access for taxpayers with substantial tax debt, known as “certification.” We find an immediate and strong positive effect on compliance actions when a passport request is denied. We then take advantage of randomization during the policy rollout to identify the direct compliance effect of certification, and find smaller but non-trivial effects whose heterogeneity is consistent with measures of taxpayers’ value of having a passport.

JEL-codes: H2 H24 H26 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-isf, nep-iue and nep-pbe
Note: PE
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