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Optimal tax auditing when some individuals need not file

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Abstract

In a situation in which people who are required to fill in a tax-return coexist with tax-return-exempt people, we prove that the optimal audit policy leads to different tax compliance behavior, depending on the difficulty of detecting an evader who does not fill in a tax return, passing himself of as a non-taxpayer.

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Correspondence to Inés Macho-Stadler.

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Macho-Stadler, I., Pérez-Castrillo, J.D. Optimal tax auditing when some individuals need not file. Economic Design 2, 99–115 (1996). https://doi.org/10.1007/BF02499127

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  • DOI: https://doi.org/10.1007/BF02499127

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