Technology may be used to engineer compliance that has not been forthcoming

Technology may be used to engineer compliance that

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message. Technology may be used to engineer compliance that has not been forthcoming previously, and is represented in Figure 13.1 as ‘bonus’ compliance.
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278 Taxing Democracy The ‘bonus’ cells are those in which an authority has its messages received and acted upon by a target without the authority having to make a direct request. Architectural strategies (Shearing and Stenning, 1985; Coglianese and Lazer, 2001) may be used by an authority to ensure compliance through making it not only the act of least resistance, but also the act that no longer requires a decision. For example, the provision of software that leads a taxpayer through a series of questions to estimate tax owing creates ‘bonus’ compliance for an authority in that various options for non-compliance are removed from consideration. This is not to deny the possibility of creative compliance while using the software package, but rather to recognize the non-compliance that is avoided through a process that generates compliance among taxpayers prepared to engage with a tax authority on ‘automatic pilot’. The key compliance questions in these circumstances are big picture questions concerning legitimacy: Will segments of the population take exception to the technological imposition of compliance and challenge the authority of the tax office as a result? Or is architecturally guided compliance seen as a time saving and security oriented device that serves everyone’s interests well? Increasingly, tax officials are searching for ways of combining architectural regulatory strategies with ‘natural systems’ for ‘best practice’. For instance, computer software that has the primary purpose of helping a small business owner manage the business better may also produce information for tax purposes, together with instructions on how to compile these data to meet tax reporting requirements. Key questions emerging from this perspective include how ‘best practice’ is learnt, how requests from regulators can be re-phrased to reflect ‘best practice’, and how compliance costs can be reduced for both regulatees and regulators. ‘Bonus’ compliance is an outcome that in itself has many facets. Other strategies that can be used by a tax authority to cultivate the growth of ‘bonus’ compliance involve reliance on principle versus rule based law (Braithwaite, 2002), or support for professional codes of practice for tax agents and tax lawyers (National Review of Standards for the Tax Profession, 1994). In these circumstances, the application of principles and codes can frame cognitive processing, steering taxpayers and their agents away from risky schemes that are on the border of avoidance and evasion. The remaining cells in Figure 13.1 are called ‘black holes’ because regulators cannot see what becomes of their requests for compliance. In these circumstances, what it means to comply is the single most important question asked by the regulator. Tax officers search for imperfect indicators that will cast light on
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  • Fall '16
  • tax authority, Australian Taxation Office, Tax Office, Compliance Model

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