Tax evasion: models with self-audit
type: Item
instance of: scholarly article
title: Tax evasion: models with self-audit
zbMATH Open document ID: 1192.91168
author: Tingting Xiao
author: Ke Liu
author: Kin Keung Lai
published in: Journal of Systems Science and Complexity
publication date: 2009-10-15T00:00:00Z
review text: Supervision with self-audit is a combination of audit by the taxpayer himself and audit by the tax authority. This paper studies a taxpayer's optimal policy of tax evasion under supervision with self-audit and its related properties. Assuming that only a certain proportion of evaded tax can be discovered when the audit is executed, the authors consider a two-stage model with self-audit. In the first stage, taxpayers declare their taxes, then the tax authority chooses audit objects, based on a known probability, and announces the result; if the taxpayer is chosen, he will enter the second stage, during which he has a chance to pay the evaded tax and the corresponding late fees and then is audited by the tax authority. The authors show the existence and uniqueness of the optimal amount of tax evasion at the first stage and the optimal proportion to self-expose at the second stage.
reviewed by: Giacomo Bonanno
Mathematics Subject Classification ID: 91B99
Mathematics Subject Classification ID: 91A80
Mathematics Subject Classification ID: 91B64
zbMATH DE Number: 5615353
zbMATH Keywords: self-audit
zbMATH Keywords: tax evasion
zbMATH Keywords: two-period model
MaRDI profile type: Publication
full work available at URL: s11424-008-9131-9
OpenAlex ID: W2005248608
cites work: Handbook of Markov decision processes. Methods and applications
DOI: 10.1007/S11424-008-9131-9
description: scientific article; zbMATH DE number 5615353