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Policy options for combatting tax noncompliance

Author

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  • Daniel S. Nagin

    (Associate Professor of Management at the School of Urban and Public Affairs, Carnegie Mellon University, and was formerly Deputy Secretary for Fiscal Policy and Analysis, Pennsylvania Department of Revenue)

Abstract

The Internal Revenue Service estimates that the “tax gap,” the difference between taxes owed and taxes voluntarily paid, is approaching 100 billion. This article examines seven categories of enforcement instruments for combatting noncompliance. The discussion has two objectives: (1) to summarize what is known about the effectiveness of each type of instrument in reducing noncompliance, and (2) to delineate criteria for evaluating the desirability of enforcement interventions of each type. Suggested criteria differ across classes of instruments, but several themes are repeatedly emphasized. One is that a relevant dimension of effectiveness is equity; a second is that private costs matter, particularly when incurred by the already compliant and independent third parties.

Suggested Citation

  • Daniel S. Nagin, 1990. "Policy options for combatting tax noncompliance," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 9(1), pages 7-22.
    • Handle: RePEc:wly:jpamgt:v:9:y:1990:i:1:p:7-22
    DOI: 10.2307/3325110
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    References listed on IDEAS

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    1. repec:bla:scandj:v:89:y:1987:i:2:p:183-92 is not listed on IDEAS
    2. Kurt J. Beron & Helen V. Tauchen & Ann Dryden Witte, 1988. "A Structural Equation Model for Tax Compliance and Auditing," NBER Working Papers 2556, National Bureau of Economic Research, Inc.
    3. Spicer, M W & Lundstedt, S B, 1976. "Understanding Tax Evasion," Public Finance = Finances publiques, , vol. 31(2), pages 295-305.
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    Cited by:

    1. Fateme Kaghazloo & Ana Clara Borrego, 2022. "Designing a Model of the Factors Affecting Tax professionals' Tax noncompliant behaviour using The ISM Approach," Public Organization Review, Springer, vol. 22(4), pages 1099-1120, December.
    2. Park, Chang-Gyun & Hyun, Jin Kwon, 2003. "Examining the determinants of tax compliance by experimental data: a case of Korea," Journal of Policy Modeling, Elsevier, vol. 25(8), pages 673-684, November.

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