An experimental evaluation of tax-reporting schedules: a case of evidence-based tax administration

Abstract

In an experiment in collaboration with the Australian Taxation Office (ATO), rental property schedules (RPS) were sent to taxpayers for them to itemize their deductions and return the RPS to the ATO. The intervention significantly reduced deductions compared to taxpayers who did not have to return the RPS, taxpayers who received only an information letter, and a no-contact control group—regardless of a cooperative versus deterring letter tone and first-time versus second-time participation of taxpayers. The study sheds light on the mechanisms underlying the effects of tax-reporting schedules and highlights the importance of systematic experimental fieldwork in evaluating regulatory strategies.