Cauble Presents Informal Tax Guidance’s Impact Today At Indiana

Emily Cauble (Wisconsin; Google Scholar) presents Informal Tax Guidance’s Impact at Indiana-Maurer today as part of its Tax Policy Colloquium hosted by Leandra Lederman:

This Article presents the results of a new survey of 2191 U.S. adults designed to gain insight into the impact that statements in informal IRS guidance have on non-expert taxpayers. The results of the survey demonstrate that such statements (taken from actual guidance) are susceptible to interpretations that are inconsistent with actual tax law.

These results underscore the need for reforms that would mitigate the harms that follow when users interpret guidance inconsistently with tax law. In addition, while some of the participants’ misconceptions were predictable, others differed from what legal experts might anticipate. This finding suggests a potential role for studying how non-experts actually interpret guidance – to supplement analysis of technical measures of its readability and reliance on expert review.

This study contributes to an existing body of literature that examines non-experts’ beliefs about law. Its focus is on how non-experts interpret guidance designed for non-experts. It concentrates on the tax context because, given taxpayers’ need to report their own tax liability, non-experts’ understanding of informal tax guidance is particularly important. However, tax law is certainly not the only area in which knowing more about how non-experts understand informal guidance could prove useful.