The Case Against Strategic Tax Law Uncertainty

50 Pages Posted: 11 Aug 2011 Last revised: 13 Aug 2011

Leigh Osofsky

University of Miami - School of Law

Date Written: August 10, 2011


Against a backdrop of ongoing angst regarding release of tax guidance, an important idea has surfaced in the tax compliance literature. Prominent tax compliance scholars have argued that the strategic use of tax law uncertainty may cause taxpayers to report higher tax liability. While these arguments have strong economic appeal, this Article counsels against their acceptance. In contrast to the support for strategic uncertainty in the literature, I argue that this move may have perverse effects on taxpayer reporting and may lower, rather than raise, revenue. This argument relies on fundamental features of the tax compliance framework, which could create significant problems with translating the theory behind strategic uncertainty into less underreporting. As a result, this Article cautions against reliance on strategic uncertainty as a tax compliance tool.

Keywords: tax compliance, uncertainty, risk, ambiguity, penalties

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

Suggested Citation

Osofsky, Leigh, The Case Against Strategic Tax Law Uncertainty (August 10, 2011). Tax Law Review, Vol. 64, No. 4, 2011. Available at SSRN:

Leigh Osofsky (Contact Author)

University of Miami - School of Law ( email )

P.O. Box 248087
Coral Gables, FL 33146
United States

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