Causes and Consequences of Income Tax Noncompliance

Taxpayer compliance is a voluntary activity, and the degree to which the tax system works is affected by taxpayers knowledge that it is their moral and legal responsibility to pay their taxes. In the United States most individuals comply with the tax law, yet the tax gap has grown significantly over time for individual taxpayers. The Causes and Consequences of Income Tax Noncompliance provides a comprehensive summary of the empirical evidence concerning taxpayer noncompliance and presents innovative research with new results on the role of IRS service activities on compliance and the causes of state income and sales tax noncompliance. Other issues examined include to what degree taxpayers respond to the threat of civil and criminal enforcement and the important roles of the media and the tax preparer on taxpayer compliance. This book offers researchers, students, and tax administrators insight into the allocation of taxpayer compliance enforcement and service resources, and suggests policies that will prevent further increases in the tax gap. The book s aggregate data analysis methods have practical applications not only to taxpayer compliance but to other forms of economic behavior, such as welfare fraud.