A COMPARATIVE ANALYSIS OF REPORTING COMPLIANCE BEHAVIOR IN LABORATORY EXPERIMENTS AND RANDOM TAXPAYER AUDITS

This paper presents a comparative analysis of reporting compliance behavior in laboratory experiments and a sample of randomly audited tax returns of sole proprietors. The random audit data are from the Internal Revenue Service's (IRS) National Research Program (NRP) sample of individual taxpay...

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Bibliographic Details
Published in:Proceedings. Annual Conference on Taxation and Minutes of the Annual Meeting of the National Tax Association 2009-01, p.113
Main Author: Bloomquist, Kim M
Format: Article
Language:English
Subjects:
Auditing
Audits
Comparative analysis
Compliance
Studies
Tax assessments
Tax rates
Tax returns
Taxable income
Taxes
Taxpayers
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Summary:This paper presents a comparative analysis of reporting compliance behavior in laboratory experiments and a sample of randomly audited tax returns of sole proprietors. The random audit data are from the Internal Revenue Service's (IRS) National Research Program (NRP) sample of individual taxpayers for tax year (TY) 2001. The analysis finds that the data from laboratory experiments contain features that are qualitatively and quantitatively similar to random audit data. The paper is organized as follows. The next section describes the data from laboratory experiments and taxpayer random audits selected for comparison. This is followed by a comparative analysis of the reporting compliance rates from the two data sets. The fourth section critiques the List and Levitt (2007) argument against using data from laboratory experiments to generalize about real-world behavior in light of the findings reported in this paper. The final section concludes.
ISSN:1549-7542
2377-567X