The runaway taxpayer or: Is prior tax notice effective against scofflaws?

Umberto Galmarini, Simone Pellegrino, Massimiliano Piacenza, Gilberto Turati

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


In order to analyze the determinants of tax evasion, the existing literature on individual tax compliance typically takes a 'prior-to-audit' point of view. This paper focuses on a 'post-audit, post-detection'-so far unexplored-framework, by investigating what happens after tax evasion has been discovered and noncompliant taxpayers are asked to pay their debts. We first develop a two-period dynamic model of individual choice, considering an individual that has been already audited and detected as tax evader, who knows that Tax Authorities are looking for her to cash the due amount. We derive the optimal decision of running away in order to avoid paying the bill, and show that the experience of a prior tax notice reduces the probability to behave as a scofflaw. We then exploit information on 'post-audit, post-detection' tax compliance provided by an Italian collection agency for the period 2004-2007 to empirically assess the relationship between prior tax notices and unlawful behavior. The evidence from alternative logit model specifications supports our theoretical prediction: successful tax notices are negatively correlated with the probability of running away. © Springer Science+Business Media New York 2013.
Original languageEnglish
Pages (from-to)468-497
Number of pages30
JournalInternational Tax and Public Finance
Publication statusPublished - 2014


  • Post-audit tax enforcement
  • Tax collection
  • Tax evasion
  • Tax notice


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