EXECUTIVE TAKEAWAYS Executive Takeaways
■ Taxpayers are more likely to report income that is not directly observable by the IRS when they are in higher agreement with the government's use of their tax dollars. ■ Higher IRS audit rates only improve taxpayer compliance when taxpayers support government programs. ■ Taxpayers view government spending on non-welfare programs, such as defense, distinctly from social welfare programs, such as healthcare, when making compliance decisions. ■ Providing taxpayers with a better understanding of why they are being taxed and how they benefit from government spending of tax revenues may improve compliance.
Jennifer Schafer, Associate Professor of Accounting
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