New Technologies and the Evolution of Tax Compliance

71 Pages Posted: 18 May 2020

See all articles by James Alm

James Alm

Tulane University

Joyce Beebe

Rice University - Baker Institute for Public Policy

Michael S. Kirsch

Notre Dame Law School

Omri Y. Marian

University of California, Irvine School of Law

Jay A. Soled

Rutgers University

Date Written: May 18, 2020

Abstract

Improving tax compliance is a common goal of governments worldwide. The United States is no exception. The size of the nation’s “tax gap” — or the difference between what taxpayers pay in taxes in a timely manner and what they should pay if they fully complied with the tax laws — is hundreds of billions of dollars annually, significantly depriving the nation of much needed revenue.

This paper explores the mixed effects of technological advancements on tax compliance — and, thus, its counterpart, tax noncompliance. On the one hand, technological advances have largely eradicated many of the commonplace tax-noncompliance techniques that once reigned during the twentieth century. On the other hand, many of these very same technological advances threaten to usher in new modes of tax evasion.

Which of these emergent trends will dominate is unclear. The outcome will largely depend upon whether Congress updates the tax laws to address technological advances and grants sufficient funding to the Internal Revenue Service to maintain robust enforcement efforts in an ever-changing technological landscape. Failure to take these steps will destine the size of the tax gap to expand.

Many prior studies have addressed discreet effects of specific technologies on tax compliance. This paper contributes to this developing literature by offering a cohesive framework to address technological advancement and tax compliance.

Suggested Citation

Alm, James and Beebe, Joyce and Kirsch, Michael S. and Marian, Omri Y. and Soled, Jay, New Technologies and the Evolution of Tax Compliance (May 18, 2020). Virginia Tax Review, Vol. 39, No.3, Spring 2020, UC Irvine School of Law Research Paper No. 2020-42, Available at SSRN: https://ssrn.com/abstract=3604507

James Alm

Tulane University ( email )

United States
5048628344 (Phone)

Joyce Beebe

Rice University - Baker Institute for Public Policy ( email )

6100 Main Street, MS-40
Houston, TX 77005
United States

Michael S. Kirsch

Notre Dame Law School ( email )

P.O. Box 780
Notre Dame, IN 46556-0780
United States

HOME PAGE: http://law.nd.edu/people/faculty-and-administration/teaching-and-research-faculty/michael-kirsch/

Omri Y. Marian (Contact Author)

University of California, Irvine School of Law ( email )

401 E. Peltason Dr.
Ste. 1000
Irvine, CA 92697-1000
United States

Jay Soled

Rutgers University ( email )

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

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