The Internal Revenue Code and Automobiles: A Case Study of Taxpayer Noncompliance

48 Pages Posted: 9 Jan 2014

See all articles by James Alm

James Alm

Tulane University

Jay A. Soled

Rutgers University

Date Written: December 1, 2013

Abstract

Over the last decade, the tax gap — the difference between what taxpayers owe in taxes and what they actually pay — has remained significantly large. A contributory factor to the tax gap’s size is the fact that many taxpayers mischaracterize the tax treatment of their automobile expenses and the receipt of other employer-provided fringe benefits. This analysis explores the reasons for this phenomenon and then proposes reforms that will make taxpayers more compliant, helping to reduce the tax gap’s size. Although these reforms admittedly would not solve all of the nation’s tax noncompliance woes, they would help preserve the income tax base and minimize economic distortions.

Keywords: Tax Gap, Automobiles

JEL Classification: K34

Suggested Citation

Alm, James and Soled, Jay, The Internal Revenue Code and Automobiles: A Case Study of Taxpayer Noncompliance (December 1, 2013). Florida Tax Review, Vol. 14, No. 10, 2013, Available at SSRN: https://ssrn.com/abstract=2376355

James Alm

Tulane University ( email )

United States
5048628344 (Phone)

Jay Soled (Contact Author)

Rutgers University ( email )

1 Washington Park
Newark, NJ 07901-1825
United States
(973) 353-1727 (Phone)

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