Under the traditional model of U.S. federal income tax reporting and compliance, taxpayers report the results of their tax planning and operations on a net basis on their federal income tax returns. They provide relatively little or no information on a transaction-by-transaction basis. Taxpayers...

Tax compliance has been studied in economics by analysing the individual decision of a representative person between paying and evading taxes. A neglected aspect of tax compliance is the interaction of taxpayers and tax authorities. The relationship between the two actors can be understood as an...