PARTICIPATION IN TAX AMNESTIES: THE INDIVIDUAL INCOME TAX

Abstract

Do tax amnesties generate revenue that would not otherwise be collected? Will tax amnesties provide continuing future revenue gains? And is an amnesty appropriate in the transition to a new tax enforcement regime? Based on economic analysis of the choice to participate in an amnesty and examination of the characteristics of participants in Michigan and other states, it appears that amnesties are not particularly effective in identifying tax evaders, so that any long-term revenue gains are likely to be small. But amnesties are appropriate in easing the transition to enhanced enforcement and seem to generate immediate revenue efficiently.