Collaborative Research on the Relationship between Income   Tax Auditing and Compliance
{'Code': '04050200', 'Directorate': {'Abbreviation': 'SBE', 'LongName': 'Direct For Social, Behav & Economic Scie'}, 'Division': {'Abbreviation': 'SES', 'LongName': 'Divn Of Social and Economic Sciences'}}
{'SignBlockName': 'Lisa Martin', 'PO_EMAI': None, 'PO_PHON': None}
Tax noncompliance is widely recognized to be an extremely                  serious problem.  Recent estimates suggest that at least $90                    billion of taxable income goes unreported annually--an average of               10 to 15 percent of total taxable income.  Concern about                        declining tax compliance has produced an outburst of policy and                 academic writing, but both the causes and the appropriate                       responses remain controversial.  Early tax compliance literature                treated tax compliance as a "portfolio problem," deriving rules                 for optimal consumption of the "risky asset" (unreported income)                under the assumption that the probability of detection is fixed.                These models produced ambiguous results.  More recent theoretical               innovations have attempted to move out of the decision-theoretic                framework to a principal-agent problem and game-theoretic model.                In these approaches the Internal Revenue Service (IRS) is allowed               to act strategically, conditioning its audit rules on the                       information it receives from taxpayers.  These interactive                      models, developed by Wilde, Reinganum and Graetz under a previous               NSF grant, yield predictions about the nature of the equilibrium                audit rule used by the IRS and the equilibrium reporting rule                   used by taxpayers.                                                                   The purpose of this research is to test a game-theoretic                   model and to develop empirical evidence on the relationship                     between audits and compliance.  Three distinct data sets are                    analyzed: (a) a cross-section data set related to 1969 individual               Federal Income Tax returns, which was assembled by the IRS in the               seventies; (b) a cross-section, time series data set related to                 state-level variables for the period 1969-1985; and (c) a data                  set related to 1979 TCMP individual return items, which was                     recently assembled by the IRS.  The major question to be                        addressed is whether, and in what fashion, audit rates respond                  interactively to the compliance behavior of taxpayers.                               The introduction of IRS as a strategic actor is considered                 to be a significant improvement in the economic theory of law                   enforcement generally.  The behavioral framework of tax non-                    compliance makes it an especially appropriate case for an                       empirical test of the theoretical construct that explicitly takes               into account the interactions and responses of the cognizant law                enforcement agency.  The research is of substantial scientific                  significance in that it promises not only to offer insights on an               important policy issue but also to add powerfully to fundamental                knowledge of the conditions that engender conformance to law.
{'FirstName': 'Michael', 'LastName': 'Graetz', 'PI_MID_INIT': None, 'PI_SUFX_NAME': None, 'PI_FULL_NAME': 'Michael Graetz', 'EmailAddress': None, 'NSF_ID': '000467107', 'StartDate': '03/15/1988', 'EndDate': None, 'RoleCode': 'Principal Investigator'}
{'Name': 'Yale University', 'CityName': 'NEW HAVEN', 'ZipCode': '065113572', 'PhoneNumber': '2037854689', 'StreetAddress': '150 MUNSON ST', 'StreetAddress2': None, 'CountryName': 'United States', 'StateName': 'Connecticut', 'StateCode': 'CT', 'CONGRESSDISTRICT': '03', 'CONGRESS_DISTRICT_ORG': 'CT03', 'ORG_UEI_NUM': 'FL6GV84CKN57', 'ORG_LGL_BUS_NAME': 'YALE UNIV', 'ORG_PRNT_UEI_NUM': 'FL6GV84CKN57'}
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[{'Code': '1320', 'Text': 'Economics'}, {'Code': '1372', 'Text': 'LSS-Law And Social Sciences'}, {'Code': '2633', 'Text': None}]
{'url': 'https://www.nsf.gov/awardsearch/download?DownloadFileName=1987&All=true', 'xml': '8704443.xml'}