Amnesties, Settlements and Optimal Tax Enforcement

25 Pages Posted: 1 Feb 1998

Multiple version iconThere are 2 versions of this paper

Date Written: September 1997

Abstract

This paper develops a model of tax enforcement in which the tax agency has discretionary power to make pre-audit settlement offers. Settlement can take the form either of general amnesties or of individual deals. It is shown that pre-audit settlements allow the agency to overcome its limited control over the enforcement parameters (the agency takes the tax and penalty levels as given) and to increase net revenue. Amnesties prove to be superior to individual deals since they allow the agency not only to extract from taxpayers their defence cost, but also to reduce an excessive tax differential.

JEL Classification: I26, K42

Suggested Citation

Franzoni, Luigi Alberto, Amnesties, Settlements and Optimal Tax Enforcement (September 1997). Available at SSRN: https://ssrn.com/abstract=56409 or http://dx.doi.org/10.2139/ssrn.56409

Luigi Alberto Franzoni (Contact Author)

University of Bologna ( email )

P.zza Scaravilli 2
Bologna, 40124
Italy
0512098488 (Phone)
+39-051-221968 (Fax)

HOME PAGE: https://www.unibo.it/sitoweb/luigi.franzoni/en

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