The article discusses conventional wisdom which is considered as a deterrence theory of tax compliance which indicates penalties for tax under-reporting. It notes the penalty rate and a model of a deduction item of uncertain value to extend the point to valuation and examines the risk created by the interaction of a penalty multiplier on the outcome of audit. It explains how the bimodality of outcomes on most legal questions alters the impact of a penalty.

Included in

Law Commons



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.