The real estate market is recognized as a fertile ground for tax violations. Specifically, reporting a price lower than the true transaction price in order to avoid tax payments is a prevalent technique. We propose an empirical method for identifying housing transactions that are suspected of...

The paper analyzes the case of tax planning that tilts the government gain/loss ratio below one, and provides a proof of a certain type of inefficiency caused by tax planning. As the paper shows, the tax imbalance distorts the firm's output level, providing the firm with an incentive to produce...