Heard it Through the Grapevine: Direct and Network Effects of a Tax Enforcement Field Experiment

39 Pages Posted: 2 Jun 2018

See all articles by William Boning

William Boning

University of Michigan at Ann Arbor - Department of Economics

John Guyton

Government of the United States of America - Internal Revenue Service (IRS)

Ron Hodge

George Mason University - School of Policy, Government, and International Affairs

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

Ugo Troiano

University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: February 2018

Abstract

Tax enforcement may affect both the behavior of those directly treated and of some taxpayers not directly treated but linked via a network to those who are treated. A large-scale randomized field experiment enables us to examine both the direct and network effects of letters and in-person visits on withheld income and payroll tax remittances by at-risk firms. Visited firms remit substantially more tax. Their tax preparers’ other clients also remit slightly more tax, while their subsidiaries remit slightly less. Letters have a much smaller direct effect and no network effects, yet may improve compliance at lower cost.

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Suggested Citation

Boning, William and Guyton, John and Hodge, Ronald and Slemrod, Joel B. and Troiano, Ugo, Heard it Through the Grapevine: Direct and Network Effects of a Tax Enforcement Field Experiment (February 2018). NBER Working Paper No. w24305. Available at SSRN: https://ssrn.com/abstract=3187792

William Boning (Contact Author)

University of Michigan at Ann Arbor - Department of Economics ( email )

Ann Arbor, MI
United States

John Guyton

Government of the United States of America - Internal Revenue Service (IRS) ( email )

1111 Constitution Avenue, NW
Washington, DC 20224
United States

Ronald Hodge

George Mason University - School of Policy, Government, and International Affairs ( email )

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Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business ( email )

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734-936-3914 (Phone)
734-763-4032 (Fax)

National Bureau of Economic Research (NBER)

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Ugo Troiano

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

HOME PAGE: http://sites.google.com/a/umich.edu/troiano

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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