We previously posted on Day One of the 2nd International Conference on Taxpayer Rights in Vienna, Austria. Below, we summarize the panels and issues discussed on Day Two.
Four panels were held on March 14: (1) Penalties and General Anti-Avoidance Rules; (2) The Role of Intergovernmental Actors in Furthering and Protecting Taxpayer Rights: A Conversation; (3) Building Trust I: Transforming Cultures of Tax Agencies; and (4) Building Trust II: Safeguards on Tax Agency Power.
Penalties and General Anti-Avoidance Rules
This panel looked at current research on the use of penalties and general anti-avoidance rules in tax administration from the perspectives of legal and economic theory and taxpayer behavior. Studies were discussed that found that delayed feedback on tax audit often results in increased tax compliance but reduces the perception of procedural fairness and diminishes trust in the taxing authorities. Participants in the studies viewed receiving delayed feedback and increasing the probability of audits and the potential for more fines. One conclusion presented was that the delay resulted in longer periods of uncertainty and may yield higher levels of honesty in the short term, but might undermine tax compliance in the long term. (more…)