Thursday, January 30, 2020
Leandra Lederman received the 2019 Tracy M. Sonneborn Award at Indiana for outstanding research and teaching. She delivered the Sonneborn Lecture on The Importance of Transparency to Tax Administration:
Transparency is an important value in any governance system because it facilitates accountability and thus confidence in the system. Tax laws may seem arcane to the average person, but those rules need to be publicly available, so that taxpayers and their advisers know how to comply with them. Transparency is equally important in tax administration. My research has included such topics as (1) why people comply with the tax laws; (2) the transparency of tax rulings before and after the “LuxLeaks” scandal, which I studied in a recent research stay in Luxembourg; and (3) the role of the U.S. Tax Court in the federal tax system. In part, these lines of research suggest that transparency in tax administration should not run in only one direction. Tax administration should be sufficiently transparent that the public has confidence in it. And, on the flip side, the tax administration needs visibility into taxpayers’ activities in order to be able to enforce the tax laws.
In discussing these examples, this lecture will also highlight the important role of information flows in tax compliance.