Can algorithms enhance bureaucrats' work in developing countries? In data-poor environments, bureaucrats often exercise discretion over key decisions, such as audit selection. Exploiting newly digitized micro-data, this study conducted an at-scale field experiment whereby half of Senegal's...

Through the synergy between an independent audit committee (AC) and the high-quality external audit, the opportunities for unethical management behavior, including tax avoidance, can be significantly reduced. Independent audit committees and fair audit fees jointly strengthen governance by...

This study investigates how strategic interactions between corporate tax planning and tax enforcement are affected by two policy instruments: strengthening tax enforcement by increasing the number of specialized enforcement staff and improving tax audit technologies. I employ an economic model...

Tax administrations increasingly use audits via mail (correspondence audits) to audit taxpayers. Correspondence audits are cheaper than face-to-face audits but their effects on compliance are unclear. We investigate the effects of correspondence and face-to-face audits on post-audit tax...

We investigate how tax authorities use joint tax audits as a coordinated enforcement tool in cross-border transactions of a multinational firm. Joint tax audits aim to resolve potential tax disputes early, before such disputes escalate into costly and time-consuming resolution procedures that...

How does political alignment with the ruling party influence the audit outcomes of the firms? This paper investigates whether political alignment with the ruling party influences the intensity and outcomes of firm audits in South Africa. Using a regression discontinuity design based on close...

Making use of a rich administrative dataset on Ugandan firms' tax filings covering the period 2013-21, this paper investigates the impact of tax audits on voluntary compliance, contrasting the effect of one vs multiple audits. Using a matched difference-in-differences approach with similar...

A large body of research has estimated the effects on tax collection of informing taxpayers of their obligations. This paper examines the effects on voluntary tax payments of providing taxpayers with information on their obligations that is collected through massive information cross-checking...

We analyze the impact of trust on bargaining behavior between auditor and auditee in a tax setting. We study the effect of interpersonal trust and trust in government on both taxpayer and tax auditor. In an experiment with variation in pairwise trust settings, we find evidence that both kinds of...

Making use of a unique administrative data set that spans the period 2012- 2019 and covers the universe of administrative tax filings in Rwanda, this paper investigates both the direct and (through tax audits) the indirect impact of the introduction of e-invoicing on firms’ reporting behaviour...

I study the long-run effects of tax audits on revenue and explore the heterogeneity in taxpayer compliance responses. This is done using waves of randomised audits of selfemployed by the Danish Tax Agency from 2006 to 2017 and leveraging novel information provided by compliance officers on...

We examine whether voluntary, cooperative tax audits are associated with incrementally greater corporate tax compliance and positive spillover to financial reporting quality relative to enforced, adversarial tax audits. Extant literature lacks a direct comparison of these options, which both...

All companies, regardless of their size, business model and scope of activities, must understand and comply with a plethora of laws and regulations in diverse areas such as employment, health and safety, intellectual property, real property, tax, antitrust, finance, securities law and consumer...

The Earned Income Tax Credit, a federal anti-poverty program administered through the tax system, provides a total of about $65 billion a year in “refundable credits” (a payment in excess of tax liability) to more than 25 million working low-income taxpayers, who receive an average of about...

This theoretical paper studies the relation between tax audits and labour market outcomes (job creation and unemployment) in an economy that contemplates penalties for firms that evade taxes and rewards for firms that comply with tax rules. Intuitively, the simultaneous presence of penalty and...

The Internal Revenue Service (IRS) is the federal agency charged with tax revenue collection. In fiscal year 2020, the IRS collected $3.5 trillion in taxes, which represented about 96 percent of aggregate annual federal funding (IRS, 2020). In its mission statement the IRS states that its...

Tax audits are the main tool adopted by tax administrations to collect taxes. Their optimal number depends on two parameters, i.e. the enforcement elasticity of tax revenue with respect to the audit effort and the sum of private compliance costs and public administrative costs entailed by...

Tax audits are the main tool adopted by tax administrations to collect taxes. Their optimal number depends on two parameters, i.e. the enforcement elasticity of tax revenue with respect to the audit effort and the sum of private compliance costs and public administrative costs entailed by...