Title page for ETD etd-03162010-105759

Type of Document Dissertation
Author Adams, Mollie
Author's Email Address mta@vt.edu
URN etd-03162010-105759
Title An Examination of the Effectiveness of Sanction Based Tax Compliance Persuasive Messages over Repeated Periods
Degree PhD
Department Accounting and Information Systems
Advisory Committee
Advisor Name Title
Salbador, Debra A. Committee Chair
Ball, Sheryl B. Committee Member
Brozovsky, John A. Committee Member
Killough, Larry N. Committee Member
Seago, W. Eugene Committee Member
  • Tax compliance
  • Persuasive messages
  • Theory of Reasoned Action
Date of Defense 2010-03-15
Availability restricted
Prior tax compliance literature has examined the use of persuasive messages that emphasize audit and sanctions as a way to increase compliance. This work has been done in single period experiments using either survey or field study methodologies. Results from the prior studies are mixed.

The theory of reasoned action is a theory of social behavior that promotes emphasizing direct consequences of actions to motivate specific behavior. Persuasive messages based on this theory have been found to be effective in a number of different disciplines. The theory of reasoned action has been used in the field of tax compliance to explain compliance behavior and examine the behavioral beliefs related to compliant reporting, but has not been used to design persuasive messages aimed at increasing compliance.

In this dissertation, I conduct a laboratory experiment that examines the effects of two types of messages - a traditional message consisting of a simple reminder of audit risk and a message designed based on the theory of reasoned action. Consistent with prior research on tax compliance, I test the messages in an initial single period but I extend prior research by also examining the effects of the messages over repeated periods. Neither the traditional message nor the message based on the theory of reasoned action have a significant effect on initial period compliance. The interaction effect of the traditional message and time on tax compliance is positive and significant and the interaction effect of the theory of reasoned action message and time on tax compliance is positive and marginally significant. These results provide evidence that the messages may be effective in increasing an individual’s tax compliance over time. In the repeated period data, the theory of reasoned action message exhibits a positive and significant impact on the amount of income reported when an individual reports less than 100% of their earned income, providing evidence that messages designed based on the theory of reasoned action may be an effective tool in reducing the tax gap.

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