The influence of tax authorities on the employment of tax practitioners: Empirical evidence from a survey and interview study

Frecknall-Hughes, Jane; Gangl, Katharina; Hofmann, Eva; Hartl, Barbara; Kirchler, Erich

Abstract

Tax practitioners play a crucial role in the degree of taxpayers’ compliance – a role that has increased as tax systems worldwide have become more complex. However, little is known about tax authorities’ impact on taxpayers’ decisions to employ tax practitioners. Based on earlier research on motivations to employ a tax practitioner and the extended slippery slope framework of tax compliance, we conducted two studies which provide some answers. A survey study – comprising a representative sample of 500 Austrian self-employed taxpayers– revealed that financial gain is not the most important reason to employ a tax practitioner but instead the motivation to avoid problems with the tax authorities. Related to that, we also find that taxpayers’ perception of tax authorities wielding coercive power motivates them to employ tax practitioners. In the interview study with 33 self-employed taxpayers and 30 tax auditors, taxpayers indicated that they sought to avoid contact with tax officers by employing tax practitioners. This finding was supported by tax officers who reported preferring interaction with tax practitioners over direct contact with taxpayers. The two studies point to the complex relationship between taxpayers, tax authorities and tax practitioners, and allow the drawing of theoretical and practical implications.

Citation

Frecknall-Hughes, J., Gangl, K., Hofmann, E., Hartl, B., & Kirchler, E. (2023). The influence of tax authorities on the employment of tax practitioners: Empirical evidence from a survey and interview study. Journal of Economic Psychology, 97, Article 102629. https://doi.org/10.1016/j.joep.2023.102629

• Journal Article Type: Article
• Acceptance Date: Mar 28, 2023
• Online Publication Date: Apr 15, 2023
• Publication Date: 2023-08
• Deposit Date: Aug 12, 2024
• Publicly Available Date: Oct 16, 2024
• Print ISSN: 0167-4870
• Electronic ISSN: 0167-4870
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 97
• Article Number: 102629
• DOI: https://doi.org/10.1016/j.joep.2023.102629
• Keywords: tax practitioners; self-employed taxpayers; tax auditors; extended slippery slope framework; tax compliance and tax avoidance
• Public URL: https://nottingham-repository.worktribe.com/output/38370667
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0167487023000302?via%3Dihub