As part of the TAS Report to Congress the study addresses two research questions regarding taxpayers attitudes. The first question: “How do attitudes towards paying taxes vary among different types of taxpayers?” For this question, the focus is on a comparison of self-employed taxpayers (audited and unaudited) and wage earners (who did or did not experience either IRS ID theft processing procedures or who experienced the IRS questioning the legitimacy of their refund return).

The second research question is: Do attitudes among audited self-employed taxpayers vary in accordance with the type of audit and the outcome of the examination?” As wage income is usually subject to third-party reporting, wage earners tend to have relatively few opportunities for tax noncompliance in comparison with self-employed taxpayers (Kleven et al., 2011). However, it is unlikely that opportunity alone drives tax compliance behavior. Personal beliefs, social norms, and past experiences with the IRS shape taxpayer attitudes. Personal experiences might be particularly relevant for taxpayers who have been victims of tax fraud involving ID theft or who have been suspected of tax fraud. Solving these cases frequently delays legitimate refund claims substantially, which imposes financial hardship on taxpayers, potentially erodes trust in the IRS, and might adversely impact voluntary compliance. Against this background, analyzing the attitudes of different occupational groups will contribute to an understanding of the determinants of tax noncompliance.

Read More