Abstract

http://ssrn.com/abstract=1575803
 
 

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When Is Tax Enforcement Publicized?


Joshua D. Blank


New York University School of Law

Daniel Z. Levin


Rutgers Business School - Newark and New Brunswick

March 20, 2010

Virginia Tax Review, Vol. 30, 2010
NYU Law and Economics Research Paper No. 10-12

Abstract:     
Every spring, the federal government appears to deliver an abundance of announcements that describe criminal convictions and civil injunctions involving taxpayers who have been accused of committing tax fraud. Commentators have occasionally suggested that the government announces a large number of tax enforcement actions in close proximity to a critical date in the tax compliance landscape: April 15, “Tax Day.” Despite their provocative implications, these claims are speculative at best, as they lack any empirical support. This Article fills the empirical void by seeking to answer a straightforward question: when does the government publicize tax enforcement? To conduct our study, we analyzed all 782 press releases issued by the U.S. Department of Justice Tax Division during the seven-year period of 2003 through 2009 in which the agency announced a civil or criminal tax enforcement action against a specific taxpayer identified by name. Our principal finding is that, from 2003 through 2009, the government issued a disproportionately large number of tax enforcement press releases during the weeks immediately prior to Tax Day compared to the rest of the year and that this difference is highly statistically significant. A convincing explanation for this finding is that government officials deliberately use tax enforcement publicity to influence individual taxpayers’ perceptions and knowledge of audit probability, tax penalties and the government’s tax enforcement efficacy while taxpayers are preparing to file their annual individual tax returns.

Number of Pages in PDF File: 38

Keywords: Tax Enforcement, Publicity, Tax Fraud, Tax Shelter, Tax Compliance, Press Release

JEL Classification: H20, H23, H24, H25, H26, H29, K34

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Date posted: March 23, 2010 ; Last revised: September 11, 2010

Suggested Citation

Blank, Joshua D. and Levin, Daniel Z., When Is Tax Enforcement Publicized? (March 20, 2010). Virginia Tax Review, Vol. 30, 2010; NYU Law and Economics Research Paper No. 10-12. Available at SSRN: http://ssrn.com/abstract=1575803

Contact Information

Joshua D. Blank (Contact Author)
New York University School of Law ( email )
40 Washington Square South, Room 430AA
New York, NY 10012
United States
(212) 998-6479 (Phone)
HOME PAGE: http://its.law.nyu.edu/facultyprofiles/profile.cfm?personID=23511
Daniel Z. Levin
Rutgers Business School - Newark and New Brunswick ( email )
Newark, NJ
United States
973-353-5983 (Phone)
973-353-1664 (Fax)
HOME PAGE: http://www.levin.rutgers.edu
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