In order to analyze the severity of sentencing, and to show how the probabilistic interpretation of strategic behavior can be tricky, this paper uses the crime strategic model (inspection game) proposed by Tsebelis. This model shows that any attempts to increase the severity of punishment will...

This article discusses the theories under which a defendant can be found guilty for the crime of tax evasion. Either a taxpayer or an enabler can be found guilty as a principal for the crime of tax evasion. The more difficult question is the role of derivative liability -- i.e., liability, or...

We investigate the effects of an institutional mechanism that incentivizes taxpayers to blow the whistle on collusive corruption and tax compliance. We explore this through a formal leniency program. In our experiment, we nest collusive corruption within a tax evasion framework. We not only...

We investigate the effects of an institutional mechanism that incentivizes taxpayers to blow the whistle on collusive corruption and tax compliance. We explore this through a formal leniency program. In our experiment, we nest collusive corruption within a tax evasion framework. We not only...

It is well known that the government’s complete failure to enforce a law can nullify that law. But what are the effects of partial enforcement? This Article shows that imperfect enforcement can alter the de facto content of the written law in predictable and beneficial ways. Specifically, in...

Taxpayers differ in ability to evade tax, and the likelihood of getting caught for cheating may depend on such ability. By assuming that the tax collection agency can classify taxpayers into different audit classes on the basis of a parameter which represents evasion ability, I derive the...

Governments increasingly use changes in tax rules to combat evasion. We develop a general approach to point-identify tax compliance along with supply and demand elasticities; identification requires data on prices and quantities before and after changes in tax enforcement and a demand or supply...

Tariff evasion by under-reporting imports declared at customs is widespread and well-documented. I argue theoretically that when the expected punishment for evading increases with the tariff rate, evasion via under-reporting may decrease when the tariff rate rises. I provide novel empirical...

We model the interaction between the informal credit market and the act of tax collection by the government; in presence and functioning of the informal credit market, the agents (the tax paying firms) engage in false or sham litigation and deferred tax payments. During the litigation period...

This paper examines the compliance pattern of small businesses, using pooled 1985 and 1988 Taxpayer Compliance Measurement Program (TCMP) data. Specifically, we focus on the voluntary reporting compliance of income from proprietorship, farm, and rental real estate activities. We find that...