Working Paper: NBER ID: w24305
Authors: William C. Boning; John Guyton; Ronald H. Hodge II; Joel Slemrod; Ugo Troiano
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.
Keywords: No keywords provided
JEL Codes: C93; H26; L14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Firms sharing a tax preparer with a visited firm (H32) | Tax remittances (H87) |
| Visited firms (L20) | Subsidiaries tax remittances (H20) |
| In-person visit from IRS revenue officer (H20) | Tax remittances (H87) |
| Soft letter treatment (Y20) | Tax remittances (H87) |