The effect of framing persuasive communications on taxpayer compliance

Scholars and policymakers worldwide are interested in how to mitigate tax evasion and maximize compliance with the tax laws. Prior research has suggested that policies covering both economic and psychological responses merit consideration by tax agencies. Psychology research, particularly in a health context, indicates that the way in which a message is framed may affect attitudes and behavior. The current study extends tax compliance research by manipulating the frame of a persuasive communication read by subjects.; This study addressed two primary research questions: (1) What effect does the communication of legal sanctions or an appeal to conscience have on taxpayer compliance? (2) What is the effect of manipulating the framing of the persuasive communications read by subjects? These questions were addressed in a mail experiment conducted in two rounds, just subsequent to tax filing season and over the summer, using 605 university employees.; The results of the study show that both legal sanctions and appeals to conscience can be effective tools for a tax agency. In this study, respondents receiving an appeal to conscience were significantly more compliant in respect of overstating deductions than respondents who received a legal sanctions communication. Further, males receiving a negatively framed legal sanctions communication were significantly more compliant in respect of income underreporting than were males in a control group.; A significant interaction effect between frame and gender for the legal sanctions group suggests that males and females can respond differently to positively and negatively framed messages. Specifically males were more compliant in response to a negatively framed legal sanctions message relative to a positively framed message containing objectively equivalent information. In direct contrast, females were more compliant in response to a positively framed legal sanctions message relative to a negatively framed message.; The findings of the study demonstrate that the message framing effects found using health-related contexts can generalize to other areas of judgment and decision making such as tax compliance and other contexts involving accounting information. Consequently when information being presented to subjects in an experiment differs across treatments, behavioral researchers should attempt to control for possible framing and gender effects.