The Minnesota income tax compliance experiment: State tax results

Coleman, Stephen (1996): The Minnesota income tax compliance experiment: State tax results.

Abstract

This report describes the Minnesota Income Tax Compliance Experiment conducted by the Minnesota Department of Revenue in 1995. The experiment tested alternative strategies to improve voluntary compliance with the state income tax. These strategies included: increased examination and auditing of tax returns with prior notice to taxpayers, enhanced services to taxpayers, information messages in letters sent to taxpayers, and a new M-1 tax form. About 47,000 taxpayers participated in the experiment. They were selected by random chance for the compliance strategies. The primary measures used to evaluate compliance strategies were change in reported income and change in reported state taxes paid from (tax year) 1993 to 1994. Changes in taxpayer groups subject to a compliance strategy were compared to changes in similar groups of taxpayes who were unaffected by the experiment (control groups).

• Item Type: MPRA Paper
• Institution: Minnesota Department of Revenue
• Language: English
• Keywords: tax compliance; economic experiment; social norms
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion and Avoidance; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments; H - Public Economics > H2 - Taxation, Subsidies, and Revenue

References

Stephen Coleman (2007). "Popular Delusions: How Social Conformity Molds Society and Politics," Cambria Press (in press).