Serious Tax Fraud and Noncompliance: A Review of Evidence on the Differential Impact of Criminal and Noncriminal Proceedings

• NCJ Number: 231361
• Journal: Criminology & Public Policy Volume: 9 Issue: 3 Dated: August 2010 Pages: 493-542
• Author(s): Michael Levi
• Date Published: August 2010
• Length: 50 pages
• Publication Format: Article
• Publication Type: Research (Applied/Empirical)
• Language: English
• Country: United States of America
• Note: Additional essays are included with this article.

Annotation

This article reviews what international evidence exists on the impact of civil and criminal sanctions upon serious tax noncompliance by individuals.

Abstract

This construct lacks sharp definitional boundaries but includes large tax fraud and large-scale evasion that are not dealt with as fraud. Although substantial research and theory have been developed on general tax evasion and compliance, their conclusions might not apply to large-scale intentional fraudsters. No scientifically defensible studies directly compared civil and criminal sanctions for tax fraud, although one U.S. study reported that significantly enhanced criminal sanctions have more effects than enhanced audit levels. Prosecution is public, whereas administrative penalties are confidential, and this fact encourages those caught to pay heavy penalties to avoid publicity, a criminal record, and imprisonment. Although it has yet to be proven that prosecution has a greater or lesser impact on these offenders, increased prosecution might be justified for purposes of moral retribution as well as perceived social fairness. Although it has yet to be proven that prosecution has a greater or lesser impact on these offenders, increased prosecution might be justified for purposes of moral retribution as well as perceived social fairness. Figure and references (Published Abstract)