TAXATION WITH REPRESENTATION - AN ANALYSIS OF THE ROLE OF TAX PRACTITIONERS IN TAX COMPLIANCE

In this paper a framework is developed for the joint analysis of tax preparation mode and tax non-compliance. Estimation is performed using micro-level audit data from the Internal Revenue Service. Although the availability of tax practitioners undoubtedly reduces many of the informational and computational barriers to tax compliance, the results indicate that their use, particularly the use of CPAs and attorneys, is associated with increased tax non-compliance, which may have negative implications for both tax equity and tax efficiency.