Brown Bag Seminar in Public Affairs: Public Involvement and Organizational Performance: Evidence fr

Event information
Start:
End:
Venue:FIU Modesto A. Maidique Campus, PCA, Room 254

Brown Bag Seminar in Public Affairs

Sponsored by the Department of Public Administration

The Department of Public Administration at the FIU School of International and Public Affairs organizes for a second year Brown Bag Seminar in Public Affairs. The seminar meets twice a month and provides an opportunity for faculty and doctoral students to present and discuss their current research in a professional yet informal setting. The seminar is open to a broad range of topics in public affairs. Previous seminars have covered issues of financial management, decentralization, administrative reform, and disaster management. The series is held every other Thursday from 12:00 pm to 1:30 pm in the Conference room of the PCA building (PCA 254). All interested students, faculty, and practitioners are invited to attend.

Next in program: On February 11, 2010, Philip C. Christian presents “Sales tax enforcement: An empirical analysis of compliance enforcement methodologies and pathologies”.

Abstract:

The body of tax evasion research is primarily focused upon the income tax with little attention given to the nuances of evasion in a retail consumption tax setting. This study explores the differences between income tax and sales tax evasion and demonstrates that sales tax enforcement requires the use of different tools and methodologies to achieve compliance. Sales tax evasion normally takes the form of sales tax theft by companies that act as collection agents in a principal-agent relationship with the state who retain funds collected as an agent of the state for private use. As such, the act of sales tax theft is more closely related to embezzlement than to income tax evasion. It has long been assumed that the sales tax is nearly evasion free, and state revenue departments report voluntary compliance in a manner that perpetuates this myth. Current sales tax compliance enforcement methodologies are similar in form to income tax compliance enforcement regimes and are based largely on trust. The primary focus is on delinquent filers and a very small percentage of businesses are ever subject to audit. As a result, there is a very large group of noncompliant businesses who file on time and “fly below the radar” while stealing millions of taxpayer dollars.

I utilize repeated-measures analysis of variance, independent samples analysis of variance, paired-samples analysis of variance, t tests, binary logistic regression and qualitative analysis with actual field data derived from operations of the Southern Region Criminal Investigations Unit of the Florida Department of Revenue to evaluate current and proposed sales tax compliance enforcement methodologies. I find that current estimates of voluntary compliance in sales tax regimes are seriously and significantly overstated and that current enforcement methodologies are inadequate to identify the majority of violators and bring them into compliance. I model sales tax evasion using the theory of planned behavior and Cressey’s fraud triangle. I demonstrate that active, well-informed enforcement activities characterized by substantial contact with non-delinquent taxpayers initiated by the agents of the state and substituted for passive or reactive activities results in superior enforcement outcomes.

Philip C. Christian is a Ph.D. candidate, Department of Public Administration, Florida International University.