The Future of Tax Audits? The Acceptance of Online-Based, Automated Tax Audits and their Effects on Trust and Power

Paul Brezina, Eva Eberhartinger, Maximilian Zieser

Publication: Working/Discussion PaperWU Working Paper


In this paper, we investigate the acceptance by taxpayers and tax auditors of voluntary e-audits, i.e., online-based, automated tax audits. Further, we analyze the effects of e-audits on trust in and power of tax authorities. Perceived benefits and shortcomings of e-audits for taxpayers and tax auditors may depend on the specific features of e-audits, which may not only affect adoption and endorsement but also influence the trust-power balance between taxpayers and tax authorities, ultimately affecting tax compliance. In an experimental survey among taxpayers and tax auditors, we focus on four specific features: data privacy, audit certainty, transparency, and independence from tax intermediaries. Results from multilevel models suggest that taxpayers’ acceptance indeed depends on these features, particularly on audit certainty, i.e., that an e-audit cannot be followed by a subsequent conventional tax audit of the same period. While these features appear to increase acceptance and trust by taxpayers, the same features cause concerns of tax auditors, who react with less support for e-audits and a perceived loss in power. These results indicate a mismatch between taxpayers’ and tax auditors’ perceptions about e-audits and tax compliance. Our study is among the first to investigate the effects of digitalization in tax administration and to include tax auditors’ views. Results are relevant to policymakers who wish to promote digitalization to foster tax compliance. Specifically, our study suggests that tax authorities should incorporate safeguards into e-audits and educate about the importance of a trusting relationship between taxpayers and tax auditors.

Publication series

NameWU International Taxation Research Paper Series

WU Working Paper Series

  • WU International Taxation Research Paper Series

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