Tax Compliance, Social Norms, and Influencers

While attaining perfect tax compliance is unachievable, more can and must be done. In the past, the country has relied primarily on a traditional system of sticks (e.g., audits and penalties) and carrots (e.g., refunds and whistleblower awards) to help narrow the “tax gap,” or the difference between what taxpayers owe in taxes and what they actually pay. Now, in the social media era, Congress and the Internal Revenue Service (IRS) should look beyond these traditional enforcement mechanisms. To achieve an even higher voluntary compliance rate, this Article advocates for policymakers to invest greater resources to enhance the social norm related to tax compliance. While scholars have long suggested that social norms play a role in tax compliance, this Article suggests a revolutionary approach, one that attempts to foster a social norm of compliance by employing the use of social media influencers. The internet and other electronic media have revolutionized and amplified the stunning impact that influencers can have. Virtually everyone, particularly the younger generation, is keenly aware of the dramatic impact that influencers can have in shaping social norms. Thus, now is the time for Congress and the IRS to capitalize on this power by strategically employing social media influencers. A well-crafted influencer campaign could educate taxpayers on how to fulfill their tax obligations, remind taxpayers of the laudatory impact of the tax system, and foster a positive social norm of compliance. Such a change in compliance orientation could help policymakers narrow the tax gap, yielding billions of dollars of additional tax revenue without the need to raise tax rates. I. Introduction II. Traditional Tax Compliance Methods ... A. Sticks ... 1. Civil and Criminal Penalties ... 2. Recordkeeping Requirements ... 3. Audit Threats ... B. Carrots ... 1. Tax Refunds ... 2. Safe Harbors ... 3. Whistleblower Awards III. The Role of Social Norms in Tax Compliance Behavior ... A. Social Norms as a Deterrent: Shaming ... B. Using Social Norms to Encourage Tax Compliance IV. Influencers ... A. The Emergence of Influencers ... B. Influencers and Their Ability to Shape Social Norms ... C. Use of Influencers to Shape Behavior ... D. Summary of Factors for Successful Influencer Campaigns V. Deployment of Influencers to Enhance Tax Compliance ... A. The Role of Influencers in Narrowing the Nation’s Tax Gap ... 1. Launching Regular Influencers’ Tax Compliance Campaigns ... a. The Message ... b. The Target Audience ... c. The Influencers ... 2. Measuring and Analyzing the Results of These Campaigns ... a. National Attitude Surveys Regarding Tax Compliance ... b. Tax Gap Studies ... B. Challenges in Using Influencers VI. Conclusion