Tax Evasion at the Top of the Income Distribution: Theory and Evidence

  title={Tax Evasion at the Top of the Income Distribution: Theory and Evidence},
  author={John L. Guyton and Patrick Langetieg and Daniel H. Reck and Max Risch and Gabriel Zucman},
  journal={National Bureau of Economic Research},
This paper studies tax evasion at the top of the U.S. income distribution using IRS micro-data from (i) random audits, (ii) targeted enforcement activities, and (iii) operational audits. Drawing on this unique combination of data, we demonstrate empirically that random audits underestimate tax evasion at the top of the income distribution. Specifically, random audits do not capture most tax evasion through offshore accounts and pass-through businesses, both of which are quantitatively important… 

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