Copyright (c) 2009 All rights reserved. http://works.bepress.com/richard_lavoie Recent documents in Richard L. Lavoie en-us Sun, 31 May 2009 10:53:27 PDT 3600 http://works.bepress.com/richard_lavoie/3 http://works.bepress.com/richard_lavoie/3 Mon, 23 Feb 2009 13:59:15 PST Why do most people pay their taxes? What distinguishes them from those who don't? Can we use those differences to increase tax compliance among those evading their taxes? This article examines the social science research concerning these questions and posits that most Western democracies have a much higher rate of tax compliance than is predicted by purely economic models due to the existence of a pervasive "taxpaying ethos" in these societies. Understanding the factors that shape and promote this taxpaying ethos provides valuable insights into the most effective means for fostering voluntary tax compliance in societies lacking a taxpaying ethos and in aberrant sub-groups within a generally taxpaying culture. After reviewing the building blocks used to craft a taxpaying ethos, the article examines how the level of noncompliance in the United States can be reduced by fostering a strong taxpaying ethos among self-employed individuals and small businesses, a segment of society that has historically shown high levels of tax noncompliance. Richard L. Lavoie Law and Economics Law and Society Taxation Taxation-Federal Income http://works.bepress.com/richard_lavoie/2 http://works.bepress.com/richard_lavoie/2 Tue, 02 Sep 2008 07:44:31 PDT This article examines the social science research concerning why individuals comply (or fail to comply) with their taxpaying obligations. The relevant empirical scholarship on the economic, behavioral and psychological aspects of compliance indicates that multiple factors are at work in fostering voluntary compliance with a person's taxpaying obligations and demonstrates that more than just economic self-interest is at work. The confluence of these factors can be viewed as creating a kind of taxpaying ethos, which explains why most Western democracies have a much higher rate of tax compliance than is predicted by purely economic models. Understanding the factors that shape and promote this taxpaying ethos provides valuable insights into the most effective means for fostering voluntary tax compliance. After reviewing the underpinnings that help create a taxpaying ethos, the article examines how this conceptual understanding of tax compliance can be employed practically to help reduce the level of systemic noncompliance (the so called tax gap) by focusing on altering the taxpaying culture in a specific segment of the population (self-employed individuals and small businesses) that has historically shown high levels of noncompliance. Richard L. Lavoie Law and Economics Law and Society Law Enforcement and Corrections Psychology and Psychiatry Taxation Taxation-Federal Income http://works.bepress.com/richard_lavoie/1 http://works.bepress.com/richard_lavoie/1 Thu, 29 Mar 2007 19:47:44 PDT This article focuses on the standards governing when an IRS examining agent should assert a deficiency against a taxpayer based on a legal issue. The IRS is charged with enforcing the tax laws and collecting unpaid taxes. However, since the United States uses a self-assessment tax system, the most important means for enforcing the law is for the IRS to create an environment that encourages taxpayers to voluntarily comply. To do this the IRS must provide understandable guidance to taxpayers and avoid over-reaching in its direct dealings with them. This article contrasts the relatively well-defined standards applicable to taxpayers in determining whether a tax return reporting position is permissible with the uncertain state of the law regarding the level of certainty required for the IRS to assert positions. The article maintains that to promote greater taxpayer compliance, the IRS should operate under more stringent standards when asserting positions than would be generally applicable to taxpayers. Richard L. Lavoie Taxation