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Tax Return Preparers and Tax Evasion

Dubin, Jeffrey A. and Kalsow, Gretchen A. and Udell, Michael A. (1998) Tax Return Preparers and Tax Evasion. Social Science Working Paper, 1031. California Institute of Technology , Pasadena, CA. (Unpublished)

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The IRS has determined that the largest amount of tax evasion is associated with a relatively small percentage of returns prepared by tax practitioners. Tax practitioners can generally serve in three roles—to assist aggressive tax planning and evasion, to act as agents for the IRS and enforce the tax code, or simply be expensive outlets for tax return preparation. Do the distributional statistics lead to the conclusion that tax practitioners cause rather than divert additional tax evasion? The purpose of this paper is to address the causal connection between return preparation choice and evasion. We find that the return characteristics for those seeking practitioners are associated with an increased opportunity for tax evasion. But our analysis also shows that tax practitioners actually lower tax evasion beyond what it would be if an individual had sought another means of preparation, such as self-preparation.

Item Type:Report or Paper (Working Paper)
Additional Information:We are grateful to the participants at the 1996 University of Illinois Tax Symposium for helpful comments. Gretchen Kalsow would like to thank the Darden Foundation for their support. This article does not necessarily reflect the views of the staff of the Joint Committee on Taxation or of any Member of Congress.
Group:Social Science Working Papers
Subject Keywords:Discrete Regression and Qualitative Choice, Tax Evasion
Series Name:Social Science Working Paper
Issue or Number:1031
Classification Code:JEL: C25, H26
Record Number:CaltechAUTHORS:20170811-160210655
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80324
Deposited By: Jacquelyn Bussone
Deposited On:11 Aug 2017 23:23
Last Modified:03 Oct 2019 18:29

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