Written Communications and Taxpayers' Compliance: An Interactional Fairness Perspective

Written communication is the primary means used by tax authorities to communicate with taxpayers. Prior research shows that the content of written communications by tax authorities can influence taxpayers' compliance by appealing to interactional fairness. Interactional fairness refers to the q...

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Bibliographic Details
Published in:Canadian tax journal 2016-04, Vol.64 (2), p.351-370
Main Authors: Farrar, Jonathan, Thorne, Linda
Format: Article
Language:English
Subjects:
Communication
Compliance
Cooperation
Correspondence
Experiments
Hypotheses
Impact analysis
Studies
Tax evasion
Taxpayers
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Summary:Written communication is the primary means used by tax authorities to communicate with taxpayers. Prior research shows that the content of written communications by tax authorities can influence taxpayers' compliance by appealing to interactional fairness. Interactional fairness refers to the quality of treatment that individuals receive from an authority figure and has two dimensions, tone and information. In written communications from a tax authority, inadvertently or by design, both tone and information are conveyed. In our study, we examine the impact of both dimensions on taxpayers' compliance through an experiment involving 287 taxpayers. We find an interaction between tone and information, such that compliance is highest in the presence of high information and an authoritative tone. We also find that compliance is positively associated with information. Our findings have practical implications for tax authorities in determining how best to use written communications to encourage taxpayers' compliance.
ISSN:0008-5111