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Tax enforcement and the intended and unintended consequences of information disclosure

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  • Konda, Laura
  • Patel, Elena
  • Seegert, Nathan

Abstract

We quantify the intended and unintended consequences to firms of increasing tax information disclosure to the IRS. Our empirical strategy leverages an exogenously staggered adoption of a redesigned federal U.S. tax form. We find that the redesign achieved the intended consequence of increasing compliance after 2011 among some firms. At the same time, we find the unintended consequence that firms changed their reporting in a way that decreased expected tax liability. We estimate that this unintended behavior reduced corporate receipts by $1.2 billion.

Suggested Citation

  • Konda, Laura & Patel, Elena & Seegert, Nathan, 2022. "Tax enforcement and the intended and unintended consequences of information disclosure," Journal of Public Economics, Elsevier, vol. 212(C).
    • Handle: RePEc:eee:pubeco:v:212:y:2022:i:c:s0047272722000925
    DOI: 10.1016/j.jpubeco.2022.104690
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    Cited by:

    1. Ye, Yongwei & Zeng, Lin & Tao, Yunqing & Yun, Feng, 2023. "Tax authority monitoring and corporate information disclosure quality in China," International Review of Financial Analysis, Elsevier, vol. 90(C).
    2. Xu, Lingling & Huang, Xiaodi & Liu, Guanchun & Liu, Yuanyuan, 2023. "Tax authority enforcement and stock price crash risk: Evidence from China," Finance Research Letters, Elsevier, vol. 55(PA).

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    More about this item

    Keywords

    Business Tax; Information Disclosure; Tax Enforcement;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • K2 - Law and Economics - - Regulation and Business Law

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