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Publication date: 20 June 2024

Jonathan Farrar, Thomas Farrar, Cass Hausserman and Morina Rennie

We examine experimentally the extent to which three potential tax authority interventions encourage the reporting of tax fraud to tax authorities and how two types of guilt…

Abstract

We examine experimentally the extent to which three potential tax authority interventions encourage the reporting of tax fraud to tax authorities and how two types of guilt feelings are involved in this decision. Using a sample of 728 adult taxpayers in the United States, we find that a cash award, a prosocial award and a moral suasion message positively influence whistleblowing intentions and that the moral suasion effect is mediated by intrapsychic guilt (when an individual violates their moral values) and interpersonal guilt (when one's actions cause harm to another). The combination of a cash award and moral suasion message results in the greatest likelihood of tax whistleblowing. Our research contributes to the tax whistleblowing literature by providing evidence of the efficacy of potential interventions and also extends literature on the role of moral emotions by showing the relevance of intrapsychic and interpersonal guilt to the tax fraud reporting decision.

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Advances in Taxation
Type: Book
ISBN: 978-1-83549-585-8

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