Sociolegal theories of why “haves” might come out ahead in the legal system have emphasized legal mobilization and the use of legal representation. Small group research points to the influence of cultural capital on social expectations and interpersonal processes of social influence and deference as another potential explanation for status advantage. This study tests these explanations in the context of state income tax audits. The results indicate that taxpayers owning larger businesses are more likely to mobilize legally, but that legal mobilization does not affect audit outcomes. Instead, taxpayers with high occupational prestige and the owners of family businesses are more likely to come out ahead in tax audits, pointing to a cultural capital explanation of why the “haves” come out ahead. Prestige effects, however, are concentrated among taxpayers who represent themselves; when tax practitioners are involved in audits, status advantages disappear. Further analyses indicate that tax practitioners level the playing field by disrupting social influence and deference processes.

Research has shown that direct experience of legal authorities' unfairness or rudeness lowers unfairly treated individuals' support for legal authorities in general and fosters noncompliance with laws. Many people, however, get information about legal authorities and institutions indirectly through conversations with others. To highlight the possible ripple effects of specific enforcement contacts on the general population's support for authorities, we compare what taxpayers said happened in their tax audit interviews with what they tell other members of their social network. Because people are most concerned about others' image of them, this motivation for communication often weakens a bias toward negative messages. Our findings demonstrate that messages about fairness of decisionmaking, favorability of outcomes, and dignity more closely approximate the distribution of the sample of audited taxpayers' perceptions. We found support, however, for a bias toward negative messages in two situations: messages about instrumental quality and in the rare circumstance when taxpayers received undignified treatment and favorable outcomes. In this circumstance, the message does not have connotations for one's own image. We discuss the implications for legal socialization and the reservoir of societal support for legal authorities and institutions.

This study examines how taxpayers evaluate the distributive justice of personal income tax burdens. Using the concept of framing from behavioral decision theory, we suggest that taxpayers employ either an outcome-processing or a norm-processing frame of tax fairness evaluation. Framing is affected by substantive tax policies and the tax situations of individuals. Taxpayers who qualify for tax deductions and other tax preferences employ an outcome-processing frame and focus on perceived abuses of government power when evaluating fairness. Those unable to claim tax breaks employ a norm-processing frame and focus on vertical social comparisons and their inability to qualify for valued tax breaks. The findings suggest that tax avoidance policies have the net effect of increasing public perceptions of unfairness in the tax system.

Past studies have generally found that perceptions of the likelihood of formal and informal sanctions have lower explanatory power of noncompliance with laws than do internalized norms. Using data from two telephone surveys, we examined a situational characteristic, structural opportunity, that may prod individuals to think about the likelihood of detection from the Internal Revenue Service for underreporting income. Structural opportunity is the degree to which an individual's economic or social situation provides ways to avoid detection. Individuals with high structural opportunity perceived a lower likelihood of IRS detection and indicated that they were less likely to feel guilty if they engaged in tax cheating. Our data also suggested that some individuals with high structural opportunity may be in social networks which condone tax cheating. As expected, structural opportunity provided a condition under which individuals took into consideration the perceived likelihood of formal and informal detection in formulating intentions to engage in tax cheating. Our findings suggest that an examination of the interaction between situational and individual characteristics will provide a more complete understanding of decisions to engage in illegal behavior. Implications for deterrence theory are discussed.

Taxpaying is a primary nexus between individual and state, and tax laws are exemplar of purposive administrative law. Our framework for research on taxpaying emphasizes that compliance is as problematic as noncompliance, that individuals have different opportunities for both compliance and noncompliance, and that taxpaying does not necessarily involve deliberate decisions. Both the process of decision making and the content of decisions must be studied. Four clusters of factors affecting the content of compliance decisions are material consequences, normative expectations, sociolegal attitudes and beliefs, and expressive factors. How individuals subjectively “frame” the factors depends upon their social situations. The framework has several implications for research on tax noncompliance.