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Full-Text Articles in Law
Understanding The Revenue Potential Of Tax Compliance Investment, Natasha Sarin, Lawrence H. Summers
Understanding The Revenue Potential Of Tax Compliance Investment, Natasha Sarin, Lawrence H. Summers
All Faculty Scholarship
In a July 2020 report, the Congressional Budget Office estimated that modest investments in the IRS would generate somewhere between $60 and $100 billion in additional revenue over a decade. This is qualitatively correct. But quantitatively, the revenue potential is much more significant than the CBO report suggests. We highlight five reasons for the CBO’s underestimation: 1) the scale of the investment in the IRS contemplated is modest and far short of sufficient even to return the IRS budget to 2011 levels; 2) the CBO contemplates a limited range of interventions, excluding entirely progress on information reporting and technological advancements; …
Does Enforcement Reduce Voluntary Tax Compliance?, Leandra Lederman
Does Enforcement Reduce Voluntary Tax Compliance?, Leandra Lederman
Articles by Maurer Faculty
Governments generally use enforcement methods, such as audits and the imposition of penalties, to deter noncompliance with tax laws. Although this approach is consistent with most economic modeling of tax compliance, some scholars caution that enforcement may backfire, “crowding out” taxpayers’ intrinsic motivations to pay taxes to such an extent that they reduce their tax payments. This article analyzes the existing evidence to determine if this occurs. In fact, field studies suggest that enforcement tools, such as audits, are effective deterrents, generally greatly increasing tax collections. A few recent studies have found that audits have a negative effect on the …
Optimal Tax Compliance And Penalties When The Law Is Uncertain, Kyle D. Logue
Optimal Tax Compliance And Penalties When The Law Is Uncertain, Kyle D. Logue
Articles
This article examines the optimal level of tax compliance and the optimal penalty for noncompliance in circumstances in which the substance of the tax law is uncertain - that is, when the precise application of the Internal Revenue Code to a particular situation is not clear. In such situations, a number of interesting questions arise. This article will consider two of them. First, as a normative matter, how certain should taxpayers be before they rely on a particular interpretation of a substantively uncertain tax rule? If a particular position is not clearly prohibited but neither is it clearly allowed, what …