Serious tax non compliance : motivation and guardianship

Abstract

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