Tax Compliance and Enforcement

2019/12/01 by Joel Slemrod · 539 citations
Business, Management and Accounting · Economics, Econometrics and Finance · Psychology · #Accounting #Audit #Business #Compliance (psychology) #Computer science #Computer security #Corporate Taxation and Avoidance #Economics #Enforcement #Evasion (ethics) #Fiscal Policy and Economic Growth #Intervention (counseling) #Law #Normative #Political science #Principal (computer security) #Psychology #Public economics #Tax evasion #Taxation and Compliance Studies

paper · doi:10.1257/jel.20181437

published in Journal of Economic Literature 57(4), 904-954 (American Economic Association)

openalex publication_date 2019/12/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04

Abstract

This paper reviews recent economic research in tax compliance and enforcement. After briefly laying out the economics of tax evasion, it focuses on recent empirical contributions. It first discusses what methodologies and data have facilitated these contributions, and then presents critical summaries of what has been learned. It discusses a promising new development—the analysis of randomized controlled trials mostly delivered via letters from the tax authority—and then reviews recent research using various methods about the impact of the principal enforcement tax policy instruments: audits, information reporting, and remittance regimes. I also explore several understudied issues worthy of more research attention. The paper closes by outlining a normative framework based on the behavioral response elasticities now being credibly estimated that allow one to assess whether a given enforcement intervention is worth doing. (JEL H26, H30)

Citations

• The Nature of the Firm
• The Elasticity of Taxable Income with Respect to Marginal Tax Rates: A Critical Review
• Salience and Taxation: Theory and Evidence
• Prospect Theory: An Analysis of Decision under Risk

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