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The Internal Revenue Code of the U.S. as well as income tax statutes in a number of states contain provisions that penalize some married couples by virtue of their marital status. These families have greater tax liabilities than would apply if the husband and wife divorced. At the same time, other married couples benefit from reduced taxes made possible by the income splitting provisions of the laws. Thus, some families receive tax benefits and others are penalized as a consequence of the choice to be married. There is now much discussion in Washington and state capitals of reducing and possibly eliminating the so-called “marriage tax”. Most proposals for reform retain the income splitting provision of the tax code; thereby avoiding direct harm to families currently receiving tax benefits from marriage. This is the approach adopted in this paper.

An offending taxpayer may plead “extenuating circumstances” in order to reduce the penalty or sanction that may be imposed in terms of section 76(1) of the Income Tax Act. The objective of this article is to examine whether the conduct of the taxpayer before, during and after the commission of an offence (usually tax evasion), in terms of section 76(1) of the Act or of the common law, can affect the level of the penalty or sanction imposed. The conclusion that can be reached is that, in appropriate circumstances, the conduct of the taxpayer can affect the level of a penalty imposed in terms of section 76(1).

The general meaning of “extenuating circumstances” for the purposes of section 76(2)(a) of the Income Tax Act, No. 58 of 1962, (the “Act”), was discussed by the current author in a previous article in this research journal. Certain defences or pleas and their effect on the level of penalties imposed by the judiciary were also analysed in previous articles in this research journal. These defences and pleas include reliance on a tax advisor, bookkeeper, accountant or member of staff and the conduct of the taxpayer before, during and after committing an offence. This article specifically examines those special or unusual defences or “extenuating circumstances” that may influence the level of a penalty that is imposed in terms of section 76 of the Act for offences that are committed in terms of that section.

Heavy penalties may be imposed on a defaulting taxpayer in terms of section 76(1) of the Income Tax Act, 58 of 1962 (the “Act”), unless “extenuating circumstances” are found to prevail, in which case any penalty imposed may be remitted partly or even in toto. This article examines the defence or plea of adverse personal circumstances, such as education, intelligence, financial means, hardship, age, influence of others, provocation and the death, insolvency or liquidation of a taxpayer, and whether such adverse personal circumstances could be considered to be “extenuating” for the purposes of section 76(2)(a) of the Act and lead to a remission of the penalties imposed.

The purpose of this paper is to investigate the impact of tax audit, tax rate and tax penalty on sales tax compliance and examine the moderating effect of patriotism on the associations between tax audit, tax rate and tax penalty with sales tax compliance among Jordanian manufacturing small- and medium-sized enterprises (SMEs).

In this study, 660 questionnaires were distributed by using systematic random sampling to manufacturing SMEs in Jordan, after which a total of 385 useable questionnaires were deemed suitable for analysis. Partial least squares structural equation modelling (PLS-SEM) was used to validate the measurement model and structural model and the predictive relevance of the study’s model.

The findings showed that tax audit and tax penalty were positively associated with the level of sales tax compliance, whereas tax rate was insignificantly associated with sales tax compliance. They also demonstrated the moderating significant effect of patriotism on the relationship between tax penalty, tax audit and tax rate with sales tax compliance.

Tax authorities and policymakers in developing majority societies in developing countries and in other Arab countries, especially in Jordan may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen eligible SMEs to comply to further boost their sales collections.

This study extends the deterrence theory in the context of sales tax compliance by proposing the moderating effect of patriotism in the deterrence theory on sales tax compliance among SMEs. Moreover, the suitability for the use of PLS-SEM as a statistical tool in investigating the extended deterrence theory with patriotism as a moderating variable as well as its implications for theory and practice was also discussed.

A taxpayer who gets caught under Part VII of the Mauritius Income Tax Act is subjected to a corrective measure only in the form of payment of the amount of tax that would have been due in the absence of the avoidance arrangement, but the consequences set out in the same section do not result in any disincentive to the taxpayer that would ensure the prevention of the occurrence of such type of anti-avoidance practices in the future. This study aims to investigate the effectiveness of the anti-avoidance provisions in the Mauritius legislation as a weapon against impermissible tax avoidance, and the study also intends to critically analyse the remedies available against taxpayers who enter into impermissible tax avoidance transactions.

The methodology adopted for this qualitative study consists of a critical analysis and comparative legal review of the relevant legislation, case laws and literature. The anti-avoidance provisions of the Mauritius legislation will be compared with similar provisions of legislations of countries that have rigid preventive rules for anti-avoidance practices, and the selected countries are the UK and Australia because each country has been successful in diminishing the tax avoidances practices further to the imposition of penalties for impermissible tax avoidance. The black letter approach will also be used through which existing legal provisions, judicial doctrines, scholar articles and budget speeches governing anti-avoidance provisions for each country identified will be analysed.

Further to an analysis of the substantial differences between Mauritius anti-avoidance legal provisions and those of the UK and Australia, it is found that the backing of corrective actions by penalties act as a disincentive to prohibit impermissible anti-avoidance practices. The study concludes that, where there is abuse of law, the law needs to provide for penalties that must be suffered by the abuser, and hence, the study calls for an amendment in the Mauritius Income Tax Act to strengthen anti-avoidance provisions, by adopting similar provisions of the laws of Australia and the UK.

At present, there is no Mauritius literature on the researched topic, and this study will be one of the first academic writings on the subject of penalties for impermissible tax avoidance in Mauritius. The study is a new and unique topic in Mauritius, and for that reason, the study will largely rely on foreign sources that deal with penalties for impermissible tax avoidance, and this will include the Australian Taxation Administrative Act 1953, Australian case laws and the UK Finance Act 2016. This study is being carried out with the view to provide insightful recommendations to the stakeholders concerned in Mauritius to enhance the revenue collection avenues and methodologies for the Mauritius revenue authorities.

Regulators can adjust penalties to compensate for incomplete monitoring of regulated parties that are subject to legal rules, but compensating penalty adjustments often are unavailable when regulated parties are subject to legal standards. Incomplete monitoring consequently invites greater noncompliance under standards than under rules. This chapter develops a model that quantifies some of the specific tradeoffs that regulators face in designing standards regimes under incomplete monitoring. The model also considers the extent to which suboptimal compliance due to incomplete monitoring is likely to result in deadweight loss in different settings.

This study analyses and discusses the application and constitutionality of the general onus of proof provision (section 82 of the Income Tax Act 58 of 1962 [the “Act”]), the presumption in favour of the State when criminal sanctions are applied to an offending taxpayer (section 104(2) of the Act) and the mechanics for imposing administrative sanctions in terms of section 76(1)(b) of the Act. The conclusion reached is that the reverse onus presumption, as provided for in terms of section 104(2) of the Act, is unconstitutional. It is penal in nature and offends against the constitutional right of an accused to a fair trial (sections 35(3) of the Constitution of the Republic of South Africa Act, 108 of 1996 [the “Constitution”]). The section 36 limitation of rights clause of the Constitution does not save it. Section 76(1)(b) of the Act read in conjunction with the deeming provision of section 76(5) of the Act, is inextricably linked to the section 82 general reverse onus provision of the Act. Hence, when these three sections are applied together, they create a reverse onus that, prima facie, violates the right to just administrative action (section 33 of the Constitution). Regarding the general reverse onus burden as provided for in terms of section 82 of the Act, the conclusion reached is that it is reasonable and justifiable in an open and democratic society and can therefore be regarded as constitutional.

The purpose of this paper is to highlight the quandary that a taxpayer may be in when choosing between disclosing a tax return position that may be contrary to Internal Revenue Service (IRS) authorities and potentially subjecting the taxpayer to substantial penalties if the position is not disclosed.

The paper describes the technical rules applicable to tax return disclosures and IRS forms and provides several examples relating to hedge funds.

The tensions between disclosure, possibly triggering an IRS audit, and nondisclosure, possibly resulting in substantial penalties, are not easily resolvable. In addition, financial accounting reporting of uncertain tax positions (FIN 48) must also be considered in weighing the alternatives.

The paper provides timely guidance from experts on tax issues relating to tax return presentation in general, and to tax issues of hedge funds in particular.

The purpose of this paper is to focus on the role of the tax agent as a preparer of tax returns and provider of professional tax advice under a system based on self‐assessment principles. It recognises the competing pressures under which tax agents attempt to discharge their professional responsibilities, and examines the implications for potentially unethical behaviour.

The paper uses a mail survey of tax professionals in Western Australia. Respondents are presented with realistic tax return scenarios, in which the demands of the client are varied according to the risk of audit, the severity of tax law and the materiality of dollar amounts involved.

The findings suggest that the severity of tax law violation is an important factor in ethical decision‐making, but that audit risk and the amounts involved are not.

The lack of support for audit risk as an influential variable is an important outcome, because policy makers have traditionally proceeded on the basis that increases in audit probabilities will reduce the likelihood of taxpayers adopting aggressive tax reporting positions. However, since the findings are based on an Australian sample, care must be taken in generalizing these findings elsewhere.

The implications are important in that alternative enforcement and compliance strategies must be considered by tax administrators.

The paper extends empirical research into taxpayer attitudes to those of the preparers of tax returns. The findings will be of relevance both to tax agents and to tax administrators.