Information Reporting and Tax Compliance
AEA Papers and Proceedings
vol. 110,
May 2020
(pp. 162-66)
Abstract
Ensuring tax compliance is an enduring problem for governments in all countries. In this paper, we examine the role of information reporting in increasing tax compliance. We first discuss the practice of information reporting in the US, including a recent IRS initiative that implemented information reporting for income received through debit and credit cards via the new Form 1099-K. We then review the literature on the compliance effects of information reporting. Finally, we report some new evidence that indicates that Form 1099-K information reporting had significant—but heterogeneous—impacts on compliance rates of different types of business reporting.Citation
Adhikari, Bibek, James Alm, and Timothy F. Harris. 2020. "Information Reporting and Tax Compliance." AEA Papers and Proceedings, 110: 162-66. DOI: 10.1257/pandp.20201041Additional Materials
JEL Classification
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- H26 Tax Evasion and Avoidance
- K34 Tax Law