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A Model of Tax Compliance Under Budget-Constrained Auditors

Graetz, Michael J. and Reinganum, Jennifer F. and Wilde, Louis L. (1984) A Model of Tax Compliance Under Budget-Constrained Auditors. Social Science Working Paper, 520. California Institute of Technology , Pasadena, CA. (Unpublished)

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In the midst of various taxpayer "revolts" and federal budget deficits of unprecedented magnitude, noncompliance with federal and state income tax laws has become an issue of significant policy concern. If the IRS' budget is limited, the probability that any individual taxpayer will be audited depends on the behavior of other taxpayers. Thus the problem of compliance involves a "congestion" effect, which generates strategic interaction among taxpayers as well as between taxpayers and the IRS. This paper reflects an initial attempt to explore how the combination of a strategic IRS and asymmetric information affects the traditional theoretical results on tax compliance behavior.

Item Type:Report or Paper (Working Paper)
Additional Information:Revised. Original dated to March 1984
Group:Social Science Working Papers
Series Name:Social Science Working Paper
Issue or Number:520
Record Number:CaltechAUTHORS:20170919-170653419
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81602
Deposited By: Jacquelyn Bussone
Deposited On:20 Sep 2017 20:13
Last Modified:03 Oct 2019 18:44

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