The Income Tax Compliance Cost of Large and Mid-Size Businesses

114 Pages Posted: 30 Jun 2006

See all articles by Joel B. Slemrod

Joel B. Slemrod

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

Varsha Venkatesh

University of Michigan, Stephen M. Ross School of Business

Date Written: September 2002

Abstract

This reports presents evidence on the compliance costs of medium-sized businesses based on a survey conducted by the Office of Tax Policy Research. The survey attempts to measure the size and composition of compliance costs and to identify firm characteristics that affect these costs. Our analysis of the responses of taxpayers and tax professionals confirms the regressivity of business compliance costs and suggests that, as a proportion of taxes paid, they are significantly higher than for the largest U.S. businesses and for individual taxpayers. Comparisons to revenue must be done carefully, however, because the majority of medium-sized businesses are in fact not taxpaying entities, but are rather pass-through entities.

Keywords: compliance costs, business taxes, tax professionals

JEL Classification: H25

Suggested Citation

Slemrod, Joel B. and Venkatesh, Varsha, The Income Tax Compliance Cost of Large and Mid-Size Businesses (September 2002). Ross School of Business Paper No. 914. Available at SSRN: https://ssrn.com/abstract=913056 or http://dx.doi.org/10.2139/ssrn.913056

Joel B. Slemrod (Contact Author)

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

701 Tappan Street
Room R5396
Ann Arbor, MI 48109-1234
United States
734-936-3914 (Phone)
734-763-4032 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Varsha Venkatesh

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

701 Tappan Street
Ann Arbor, MI MI 48109
United States

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