Uncertainty and Tax Enforcement: A Case for Moderate Fault-Based Penalties, 64 Tax L. Rev. 453 (2010)
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.