An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Tracy S. Manly
University of Tulsa

Deborah W. Thomas
University of Arkansas

Christina M. Ritsema
Hope College

Abstract: The IRS highlights three taxpayer behaviors that contribute to the tax gap: nonfiling, underreporting and underpayment. Unlike the other two components, not all nonfilers actually contribute to the tax gap. Many nonfilers owe no additional tax or are actually due a refund, perhaps choosing not to file because the burden to do so is higher than the benefit. Drawing information from nonfilers who later participate in a state tax amnesty program, we compare nonfilers who owe additional tax to nonfilers who do not. We find that these two groups differ significantly on almost all dimensions tested. We further compare subgroups of nonfilers who do not owe tax, separating those due a larger refund. Our results provide insight into the nonfiling population, a focus of the Collection Governance Council (CGC), an executive group recently established by the IRS and charged with developing initiatives, implement systems, and provide accountability for all of the

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