Abstract
Literature on tax compliance has experienced explosive growth in the past 20 years. Yet the vast majority of this work has focused on individuals and compliance with the personal income tax, rather than company compliance and compliance with other taxes. This paper explores the subject of sales tax audit selection and firm underreporting of statutory sales tax liabilities. The analysis relies on sample selection estimation techniques in identifying systematic audit selection rules and the determinants of sales tax underreporting. The results support the view that sales tax accounts are chosen for audit nonrandomly. The analysis also provides strong evidence that taxpayer opportunities for underreporting are correlated with the observed behavior of firms.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
