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Journal of Business Ethics

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09.02.2017 | Original Paper

The Effect of Interactional Fairness and Detection on Taxpayers’ Compliance Intentions

verfasst von: Jonathan Farrar, Steven E. Kaplan, Linda Thorne

Erschienen in: Journal of Business Ethics | Ausgabe 1/2019

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Abstract

Although the role of fairness in tax compliance has been of increasing interest among the academic and professional tax communities, very little is known about the role of interactional fairness. Interactional fairness refers to the quality of the treatment provided to individuals from authority figures, such as tax authority representatives. We conduct an experiment using US taxpayers to examine the role of interactional fairness on tax compliance intentions, and how detection influences this relation. Taxpayers’ detection salience reflects their perceptions that they will be audited by the tax authority. Using insights from conditional cooperation theory, we predict and find that detection moderates the relation between interactional fairness and tax compliance intentions, such that the effect of interactional fairness on tax compliance intentions diminishes with higher detection. We discuss the implications of our results for tax policy.

Vorheriger Artikel Do Local Protestant Values Affect Corporate Cash Holdings?

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Using dummy responses, the firm initially tested all web links to ensure they were working properly. We verified that the dummy data were accurately populated into the software. The firm then launched the data collection. The firm provided us with an update at the end of each day of the number of complete responses they had collected. The firm also recalibrated the sample at the end of each day so that our gender and age parameters were as accurate as possible.

We checked our sample against U.S. census data (U.S. Census Bureau, Current Population Survey, 2014 Annual Social and Economic Supplement) that segmented the U.S. population according to income and education level. Our income segments matched those used in this population survey. Our sample was similarly weighted to that of the US population with two exceptions: (1) The income category below $50,000 was underweight (by about 8%) relative to the census data, and (2) our income category above $75,000 was weighted 6% more than the census data. Given that the population of the income category below $50,000 is the one least likely to pay tax, we believe that our sample is relatively representative of the broader population of US taxpayers.

As discussed earlier, we chose a phone call because it is a common and widespread method of contacting the IRS. For example, in the period from January 1 through March 5, 2016, the IRS received 46.1 million telephone calls (https://www.treasury.gov/tigta/auditreports/2016reports/201640034fr.pdf, p. 16).

Consistent with the tax compliance literature (Blanthorne and Kaplan 2008; Bobek and Hatfield 2003; Carnes and Englebrecht 1995; Sanders et al. 2008; Verboon and van Dijke 2007), we use compliance intentions as a proxy for taxpayers’ compliance.

We also tested whether any demographic variables were associated with either independent variable or the interaction between the two independent variables. With the exception of age, the demographic variables were not associated with the independent variables. Age was significantly higher in the lower condition of detection expectations (M = 43.6, SD = 14.6) compared to the higher condition of detection expectations (M = 39.04, SD = 15.0), F(1203) = 4.80, p = .03). We do not include age in the model because it was not associated with the dependent variable, compliance intentions.

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Titel: The Effect of Interactional Fairness and Detection on Taxpayers’ Compliance Intentions
verfasst von: Jonathan Farrar
Steven E. Kaplan
Linda Thorne
Publikationsdatum: 09.02.2017
Verlag: Springer Netherlands
Erschienen in: Journal of Business Ethics / Ausgabe 1/2019
Print ISSN: 0167-4544
Elektronische ISSN: 1573-0697
DOI: https://doi.org/10.1007/s10551-017-3458-x

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