Tax Compliance in a Decentralizing Economy

34 Georgia State University Law Review 283 (2018)

46 Pages Posted: 19 Jul 2017 Last revised: 28 Sep 2019

Date Written: July 13, 2017


Tax compliance in the United States has long relied on information from centralized intermediaries — the financial institutions, employers, and brokers that help ensure income is reported and taxes are paid. Yet while the IRS remains tied to these centralized entities, consumers and businesses are not. New technologies, such as the “sharing” economy (companies such as Airbnb, Uber, and Instacart) and the blockchain (the platform on which Bitcoin is based) are providing new, decentralized options for exchanging goods and services. Without legislative and agency intervention, these technologies pose a critical threat to the reporting system underlying domestic and international tax compliance.

Until now, legal academia has paid scant attention to the extent to which U.S. tax compliance relies on centralized intermediaries as information reporters. Prior scholarship has instead focused on describing existing information reporting protocols and the characteristics of successful reporters. This Article moves further, first demonstrating that both domestic and international tax compliance cannot function without these centralized intermediaries. Next, the Article argues that the potential decentralization caused by new technologies should not be neglected, and it proposes a series of legislative reforms so that Congress and the IRS can act prospectively, rather than retrospectively, to minimize the future threat to U.S. tax compliance.

Keywords: taxation, tax compliance, information reporting, sharing economy, 1099

Suggested Citation

Viswanathan, Manoj, Tax Compliance in a Decentralizing Economy (July 13, 2017). 34 Georgia State University Law Review 283 (2018), Available at SSRN: or

Manoj Viswanathan (Contact Author)

UC Hastings Law ( email )

200 McAllister Street
San Francisco, CA 94102
United States

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