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The Effects of Message Quotes on Tax Compliance

Research output: Contribution to journalArticlepeer-review

Abstract

This paper examines the effects of regulatory focus and regulatory fit theories on taxpayer compliance when taxpayers are exposed to predetermined quotes by the Internal Revenue Service (IRS) or other tax authority officials. A promotion-oriented regulatory focus is concerned with advancement, growth, and accomplishment, whereas a prevention-oriented regulatory focus is concerned with protection, safety, and responsibility. Using an experimental approach, we find that promotion-oriented (prevention-oriented) individuals are more likely (less likely) than prevention-oriented (promotion-oriented) individuals to self-report income for tax purposes. We also find that (1) promotion-oriented (prevention-oriented) individuals are less (more) likely to self-report income when presented with prevention-focused and neutral quotes as compared to messages with no quotes, and (2) promotion-oriented individuals who read promotion-focused quotes are more likely to self-report income than those reading prevention-focused message quotes. The results suggest theoretical and practical implications for tax compliance.

Original languageEnglish
Pages (from-to)25-43
Number of pages19
JournalJournal of Forensic Accounting Research
Volume8
Issue number1
DOIs
StatePublished - 2023

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

  1. SDG 16 - Peace, Justice and Strong Institutions
    SDG 16 Peace, Justice and Strong Institutions

Keywords

  • financial crimes
  • Internal Revenue Service Criminal Investigation
  • IRS CI
  • prevention focus
  • promotion focus
  • public information
  • publicity
  • tax compliance
  • tax crimes
  • tax evasion

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