Audit Certainty, Audit Productivity, and Taxpayer Compliance

Strategies for dealing with evasion include such standard policies as stricter enforcement (e.g., increased audit rates, more extensive audits, larger penalties). However, the exact responses of taxpayers to these enforcement measures are quite difficult to measure with existing field data, and so are not known precisely. In this paper we use experimental methods to examine how individuals respond in their compliance decisions to a "certain" probability of audit and to information concerning the "productivity" of an audit. Our design informs some individuals that their return will be audited with certainty prior to making their compliance decision, while other individuals receive information that they will not be audited; we also inform individuals of the productivity of the audit by stating how much unreported income will be discovered via the audit. We find that the announcement of audits increases the compliance rate of those who are told that they will be audited. However, the compliance rate of those who know that they will not be audited falls, and the net effect is that overall compliance falls. Working Paper 06-4

The Effects of Communication Among Taxpayers on Compliance

Taxpayer audits are thought to have a direct deterrent effect on the individuals actually audited. In addition, audits are believed to have an indirect deterrent effect on individuals not audited as these individuals learn (or are told) about the audits of other taxpayers. However, the effects on compliance of the ways in which taxpayers learn about - and communicate among themselves - audit rates are not known. In this study, we use laboratory experiments to examine the effects of three types of information and communication on compliance. In all sessions, each subject knows the probability of audit and the results of their own audit (if any). In our base case session, each subject knows only the result of his or her audit, and subjects receive no information about audit results of other subjects. In a second treatment (termed "official" communication), subjects are also told by the experimenter the actual number of audits conducted during a period. In a third treatment (or "unofficial" communication), subjects are offered the opportunity to send a "message" to the other participants about their audit experience. Our preliminary results indicate that "unofficial" communication has a strong indirect effect that increases compliance, but that "official" communication may not encourage voluntary compliance

Audit Information Dissemination, Taxpayer Communication, and Compliance Behavior

Taxpayer audits are a central feature of the voluntary compliance system in the United States federal individual income tax. Audits are thought to have a direct deterrent effect on the individuals actually audited. Audits are also believed to have an indirect deterrent effect on individuals not audited, and in fact there is some empirical evidence that audit rates affect compliance beyond the audited individuals themselves. However, empirical studies cannot measure or control for taxpayer awareness of audit risk, and they also cannot uncover the behavioral channels through which the direct and indirect effects operate; that is, the ways in which taxpayers learn about - and communicate among themselves - audit rates, and the subsequent effects on compliance, are not known and cannot be discovered by empirical studies. In this study, we use laboratory experiments to examine several types of information dissemination and taxpayer communication about audit frequency and audit results. These experiments allow us to test hypotheses about the effects of two types of communication of audit policies and results, in order to explore the direct and the indirect effects of audits: "official" information disseminated by the "government" (e.g., the experimenter) and "unofficial", or informal, communications among "taxpayers" (e.g., the subjects). Our results indicate that "unofficial" communications have a strong indirect effect on compliance: messages that indicate that a subject was not audited or was able to cheat actually reduce compliance, while messages that a subject was audited or paid his or her taxes increase compliance. Also, "official" announcements of information may not always encourage voluntary compliance. Working Paper 06-4

Do Individuals Comply on Income Not Reported by Their Employer

Individuals (e.g., the self-employed and those earning casual wages such as tips) with income not reported to the tax authority by a third party may be less likely to be detected evading taxes relative to the case in which their income is subject to third-party reporting. However, their compliance responses - to changes in the proportion of income that is reported to the tax authority, to changes in audit and tax rates, and so on - are largely unknown, in part because of the difficulty in obtaining information on individual choices in these situations. We use experimental methods to examine individual income tax compliance in settings where individuals differ in the portion of their income that is "matched" (or reported to the tax authority via third-party information) versus "nonmatched" (or not fully reported to the tax authority). Our results indicate that individuals who have relatively more non-matched income exhibit significantly lower tax compliance rates than individuals who earn relatively less non-matched income. Our results also indicate that higher income levels, higher tax rates, and lower audit rates lead to increased tax evasion, but with responses that vary depending upon the proportion of matched versus non-matched income. Working Paper 07-3

The Kinematics of Molecular Cloud Cores in the Presence of Driven and Decaying Turbulence: Comparisons with Observations

In this study we investigate the formation and properties of prestellar and protostellar cores using hydrodynamic, self-gravitating Adaptive Mesh Refinement simulations, comparing the cases where turbulence is continually driven and where it is allowed to decay. We model observations of these cores in the C$^{18}$O$(2\to 1)$, NH$_3(1,1)$, and N$_2$H$^+(1\to 0)$ lines, and from the simulated observations we measure the linewidths of individual cores, the linewidths of the surrounding gas, and the motions of the cores relative to one another. Some of these distributions are significantly different in the driven and decaying runs, making them potential diagnostics for determining whether the turbulence in observed star-forming clouds is driven or decaying. Comparing our simulations with observed cores in the Perseus and $\rho$ Ophiuchus clouds shows reasonably good agreement between the observed and simulated core-to-core velocity dispersions for both the driven and decaying cases. However, we find that the linewidths through protostellar cores in both simulations are too large compared to the observations. The disagreement is noticably worse for the decaying simulation, in which cores show highly supersonic infall signatures in their centers that decrease toward their edges, a pattern not seen in the observed regions. This result gives some support to the use of driven turbulence for modeling regions of star formation, but reaching a firm conclusion on the relative merits of driven or decaying turbulence will require more complete data on a larger sample of clouds as well as simulations that include magnetic fields, outflows, and thermal feedback from the protostars.Comment: 18 pages, 12 figures, accepted to A

Influence of material quality and process-induced defects on semiconductor device performance and yield

An overview of major causes of device yield degradation is presented. The relationships of device types to critical processes and typical defects are discussed, and the influence of the defect on device yield and performance is demonstrated. Various defect characterization techniques are described and applied. A correlation of device failure, defect type, and cause of defect is presented in tabular form with accompanying illustrations

Type 2 diabetes in Tirana City, Albania: a rapid increase in a country in transition.

AIMS: To determine how the prevalence of Type 2 diabetes mellitus has changed in Tirana, the capital of Albania, over 20 years. METHODS: Cluster sampling was used to select 700 households including 1540 adults 25 years of age and over in Tirana City, Albania in 2001. RESULTS: Of 1540 potential subjects, 1120 participated (response rate 72.7%). Using the 1985 WHO criteria to provide comparability with earlier data, the overall prevalence of Type 2 diabetes mellitus in the age group 25+ was 6.3% (95% confidence interval 4.8-7.7); 6.9% (4.8-9.1%) male; 5.6% (3.8-7.5%) female. The age-adjusted prevalence in those aged 25+ was 5.4%. Of respondents, 3.4% were known to have diabetes, and 2.9% were newly identified through the survey. The prevalence of diabetes increased with age, although among men there was a slight decline after age 65. Impaired glucose tolerance was found in a further 2.9% of respondents, again increasing with age. The prevalence of diabetes has increased significantly since 1980, doubling in the age group 50+. Use of the 1999 WHO diagnostic criteria produces a higher unadjusted prevalence, at 9.7% (8-11.4%). In a logistic regression model, obesity and family history were independent determinants of the probability of having diabetes. Among those known to have diabetes, control was poor. CONCLUSIONS: The prevalence of diabetes in Albania has increased rapidly, consistent with what has been seen in other countries undergoing rapid modernization. It is likely to increase further in the future, with important implications for health policy

The response of smoke detectors to pyrolysis and combustion products from aircraft interior materials

The following projects were completed as part of the effort to develop and test economically feasible fire-resistant materials for interior furnishings of aircraft as well as detectors of incipient fires in passenger and cargo compartments: (1) determination of the sensitivity of various contemporary gas and smoke detectors to pyrolysis and combustion products from materials commonly used in aircraft interiors and from materials that may be used in the future, (2) assessment of the environmental limitations to detector sensitivity and reliability. The tests were conducted on three groups of materials by exposure to the following three sources of exposure: radiant and Meeker burner flame, heated coil, and radiant source only. The first test series used radiant heat and flame exposures on easily obtainable test materials. Next, four materials were selected from the first group and exposed to an incandescent coil to provide the conditions for smoldering combustion. Finally, radiant heat exposures were used on advanced materials that are not readily available