Is it Easier to Lie to Tax Software than a Tax Professional? Experimental Evidence.

• In Event: Behavioral Tax Research

Abstract

Individuals are increasingly switching from hiring tax professionals to prepare their tax returns to self-filing with tax software. However, there is little empirical research studying how interacting with tax software influences compliance decisions (relative to interacting with tax professionals). Based on theory, we predict individuals are more willing to lie and therefore engage in noncompliance when interacting with tax software than with a tax professional because tax software is perceived as less likely to detect a lie and less socially present. Results from a structural equation model based on data collected from 160 actual taxpayers support our hypotheses. Given the pervasiveness of interactions with technology in business and everyday life, our results broadly contribute to accounting and other literatures by examining why individuals interact differently with computers versus humans.

Authors

• Ethan G LaMothe, University of South Carolina

• Donna Bobek Schmitt, University of South Carolina