Real effects of tax audits

• 成果类型: Article
• 署名作者: Belnap, Andrew; Hoopes, Jeffrey L.; Maydew, Edward L.; Turk, Alex
• 署名单位: University of Texas System; University of Texas Austin; University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-022-09717-w
• 发表日期: 2024
• 页码: 665-700
• 关键词: Field experiments; irs audits; ENFORCEMENT; BEHAVIOR; jobs

摘要

Tax audits are a necessary component of the tax system, but policymakers and others have expressed concerns about their potentially adverse real effects. Understanding the causal effects of tax audits has been hampered by lack of data and because typically tax audits are not randomly assigned. We use administrative data from random tax audits of small businesses to examine the real effects of being subject to a tax audit. We find that audited firms are more likely to go out of business following the audit. The effect is concentrated in firms that underreport their taxes, although we find some evidence that the administrative costs of an audit also negatively affect firm survival. Among firms that continue as going concerns, we find evidence that audits have adverse effects on future revenues but no effect on future wages, employment, or investment. Finally, we find that tax audits have side benefits, causing firms to make changes to improve their tax efficiency.