Tax Enforcement and the Intended and Unintended Consequences of Information Disclosure
57 Pages Posted: 1 Jun 2020 Last revised: 20 Jul 2020
Date Written: May 4, 2020
We quantify the intended and unintended consequences to firms of increasing tax information disclosure to the IRS. Our empirical strategy leverages an exogenously staggered adoption of a redesigned tax form. We find that the redesign was successful at increasing compliance after 2011 among some firms, the intended consequence. At the same time, we find that firms changed their reporting in a way that decreased expected tax liability, an unintended consequence. We estimate that this unintended behavior reduced corporate receipts by $1.3 billion.
Keywords: Business Tax, Information Disclosure, Tax Enforcement
JEL Classification: H25, H26, M4, K2
Suggested Citation: Suggested Citation