Improving tax compliance: deductions for work related expenses in income tax returns filed through tax agents

Last registered on March 26, 2017
View Trial History

Pre-Trial

Trial Information

General Information

Title
Improving tax compliance: deductions for work related expenses in income tax returns filed through tax agents
RCT ID
AEARCTR-0002132
Initial registration date
March 24, 2017

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
March 26, 2017, 12:40 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Australia
Region

Primary Investigator

Name
Michael Hiscox
Affiliation
Harvard University
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
In development
Start date
2017-03-10
End date
2017-05-31
Keywords
Finance & Microfinance, Governance
Additional Keywords
social norms, tax, compliance, deductions, tax agents, audit
JEL code(s)
D03 (Behavioural Microeconomics: underlying principles); D73 (Bureaucracy • Administrative Processes in Public Organizations • Corruption); D31 (Personal Income, Wealth, and Their Distributions); D53 (Financial Markets)
Secondary IDs
Abstract
Australians can claim income tax deductions when they incur costs in the course of earning income (e.g., vehicle and other work-related travel costs). Work related expenses are the most common deduction claimed by Australians. In 2014-15 total claims amounted to a total of $21 billion.

The majority of Australian taxpayers that claim work-related expenses in their income tax returns lodge these forms through a registered tax agent. This trial, delivered in collaboration with the Australian Tax Office (ATO), will test a new method, informed by behavioural insights, aimed at supporting Australians to lodge accurate work related expense claims. The trial will test the effectiveness of a letter sent to tax agents reminding them the ATO has a data analytics system that identifies larger-than-expected claims and encouraging them to review their clients’ claims.
External Link(s)

Registration Citation

Citation
Hiscox, Michael. 2017. "Improving tax compliance: deductions for work related expenses in income tax returns filed through tax agents." AEA RCT Registry. March 26. https://doi.org/10.1257/rct.2132-1.0
Former Citation
Hiscox, Michael. 2017. "Improving tax compliance: deductions for work related expenses in income tax returns filed through tax agents." AEA RCT Registry. March 26. https://www.socialscienceregistry.org/trials/2132/history/15460
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Tax agents in the treatment group will receive a letter aimed at improving tax compliance amongst their individual clients.
Intervention Start Date
2017-03-10
Intervention End Date
2017-04-30

Primary Outcomes

Primary Outcomes (end points)
Primary: (1) Average work-related expense claim (2) Amendments to past returns (3) Amendments to past returns of clients on attached list
Secondary: (1) Total deductions (2) Net tax paid (3) Proportion of clients on attached list who amend past returns (4) Average WRE claim for subsequent tax year
Outcomes will be evaluated at the agent level and the individual level.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Tax agents will be randomly allocated to receive the letter or not.
Experimental Design Details
The sample will be selected from a group of tax agents with higher claiming clients who are not already involved in compliance action with the ATO. Agents in scope will be randomly allocated into a treatment group that will receive a letter from the ATO, and a control group that will not receive the letter. Outcome measures will be recorded in several months’ time to allow for any late lodgements made by tax agents.
Randomization Method
Randomization will be done by a computer algorithm. Agents will be stratified by type, and then matched using non-bipartite pair matching.
Randomization Unit
Tax agents
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
2287 tax agents
Sample size: planned number of observations
Approximately 20,000 individual clients of tax agents
Sample size (or number of clusters) by treatment arms
1,144 tax agent clusters in treatment and 1,143 tax agent clusters in control
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
For the outcome measure of average WRE claims by agent, assuming alpha = 0.05 and power = 0.8 the study is powered to detect a 9.0% effect size.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
BETA Ethics Committee
IRB Approval Date
2017-01-31
IRB Approval Number
BETA ETH 2017 - 004
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials