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The Effect of Audit Burden on Subsequent Tax Evasion

Amy M. Hageman et al.

Journal of the American Taxation Association2025https://doi.org/10.2308/jata-2023-048article
AJG 3ABDC A
Weight
0.43

Abstract

Audited taxpayers can be compelled to expend both monetary and nonmonetary resources during an audit, irrespective of compliance levels. We refer to these audit-related expenditures as “audit burden,” and examine how they impact subsequent compliance decisions. Motivated by cost-loss framing theory, we predict audit burden influences individuals who were initially noncompliant (compliant) on an audited return to subsequently increase (decrease) compliance. Consistent with hypotheses, results from our first experiment suggest burdensome audits deter noncompliance for those who evaded, but also precipitates noncompliance for initially compliance taxpayers. A second experiment shows results are robust to alternative operationalizations of audit burden. Mediation analysis from our third experiment suggests the effect of audit burden results from differences in how groups respond to the perceived expenditure of audit burden. Finally, results from our fourth and final experiment suggest a simple apology can weaken the compliance-reducing effect of burdensome audits on initially compliant individuals. Data Availability: Data are available from the authors upon request. JEL Classifications: H26.

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https://doi.org/https://doi.org/10.2308/jata-2023-048

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@article{amy2025,
  title        = {{The Effect of Audit Burden on Subsequent Tax Evasion}},
  author       = {Amy M. Hageman et al.},
  journal      = {Journal of the American Taxation Association},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.2308/jata-2023-048},
}

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Evidence weight

0.43

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.32 × 0.4 = 0.13
M · momentum0.55 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.