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An Empirical Analysis of Federal Income Tax Auditing and Compliance

Dubin, Jeffrey A. and Wilde, Louis L. (1987) An Empirical Analysis of Federal Income Tax Auditing and Compliance. Social Science Working Paper, 615. California Institute of Technology , Pasadena, CA. (Unpublished)

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This paper provides empirical evidence on the relationship between compliance with the Federal Income Tax and auditing by the Internal Revenue Service. It combines a cross-section data set related to 1969 individual returns assembled by the IRS with data taken from the Annual Report of the Commissioner of Internal Revenue. We find strong support for an economic approach to tax compliance, but one that incorporates the IRS as a strategic actor. In particular, while audits may have a deterrent effect on noncompliance, we find that they are themselves, in the majority of cases, responsive to the pattern of compliance.

Item Type:Report or Paper (Discussion Paper)
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Additional Information:Revised. Original dated to October 1986. We would like to thank Bill Lefbom, Chairman of the TCMP committee of the IRS, for providing us with the 1969 IRS cross-section data set and helping us decipher it. Helpful comments have been provided by Dave Grether, Tom Gilligan, Rod Kiewiet, and especially Michael Graetz. This paper is a substantially revised version of Dubin and Wilde (1986). Published as Dubin, Jeffrey A., and Louis L. Wilde. "An empirical analysis of federal income tax auditing and compliance." National tax journal (1988): 61-74.
Group:Social Science Working Papers
Subject Keywords:Tax audits, Taxes, Taxpaying, Datasets, Auditing standards, Income taxes, ZIP codes, Employment statistics, Business audits, Tests of compliance
Series Name:Social Science Working Paper
Issue or Number:615
Record Number:CaltechAUTHORS:20170912-150755319
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81383
Deposited By: Jacquelyn Bussone
Deposited On:15 Sep 2017 18:37
Last Modified:03 Oct 2019 18:42

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