TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, July 21, 2011

Leviner & Richison: The Role of Paid Preparers in Taxpayer Compliance

Sagit Leviner (SUNY-Buffalo) & Kyle Richison (IRS Office of Research, Analysis, and Statistics) have posted Tax Preparers And The Role They Play In Taxpayer Compliance: An Empirical Investigation With Policy Implications on SSRN. Here is the abstract:

This paper underscores the growing need to shed better light on tax preparers and their effect on the tax system and its administration. To this end the paper undertakes an empirical analysis of U.S. individual tax returns looking at three main variables. The two independent parameters include: (1) tax return characteristics: by line item and type of return, and (2) preparation mode: whether the return is self or paid prepared; if paid – by which type of preparer. The third, dependent, variable is the compliance or noncompliance of the return examined. The analysis draws from 3,457 tax returns where taxpayers claimed the Earned Income Tax Credit (EITC) for Tax Year 1999. These returns have all been subject to either face-to-face or correspondence audit and provide a uniquely thorough pool of data presently unavailable for the general population. By offering a taxonomy of noncompliant returns as associated with the independent variables the paper explores both the motivations behind and facilitators of tax noncompliance as well as the strategies to curb them so as to more effectively ensure the integrity of the tax system.

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