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Reminders & Recidivism: Evidence from Tax Filing & EITC Participation among Low-Income Nonfilers

Author

Listed:
  • John Guyton
  • Dayanand S. Manoli
  • Brenda Schafer
  • Michael Sebastiani
Abstract
This project examines how reminders affect tax filing among lower-income nonfilers (individuals who did not appear on a filed tax return but had income reported by third parties to the Internal Revenue Service). We present novel data on this population and results from two randomized controlled trials. The results demonstrate that one-time reminders increase tax filing, both to claim tax refunds based in part on withholdings and Earned Income Tax Credit benefits, as well as to voluntarily pay balances owed to the IRS. However, these effects do not persist. Consistent with recency effects, individuals who owe a balance due appear more likely to recidivate into nonfiling than those who receive refunds. Follow-up reminders continue to increase tax filing, particularly among individuals who previously had to pay balances to the IRS instead of receive refunds.

Suggested Citation

  • John Guyton & Dayanand S. Manoli & Brenda Schafer & Michael Sebastiani, 2016. "Reminders & Recidivism: Evidence from Tax Filing & EITC Participation among Low-Income Nonfilers," NBER Working Papers 21904, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:21904
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    References listed on IDEAS

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    Cited by:

    1. Dina Pomeranz & José Vila-Belda, 2019. "Taking State-Capacity Research to the Field: Insights from Collaborations with Tax Authorities," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 755-781, August.
    2. Jan-Emmanuel De Neve & Clément Imbert & Johannes Spinnewijn & Teodora Tsankova & Maarten Luts, 2021. "How to Improve Tax Compliance? Evidence from Population-Wide Experiments in Belgium," Journal of Political Economy, University of Chicago Press, vol. 129(5), pages 1425-1463.
    3. Hargaden, Enda Patrick, 2020. "Taxpayer responses in good times and bad," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 653-690.
    4. Bastani, Spencer & Giebe, Thomas & Miao, Chizheng, 2020. "Ethnicity and tax filing behavior," Journal of Urban Economics, Elsevier, vol. 116(C).
    5. David Neumark & Katherine E. Williams, 2020. "Do State Earned Income Tax Credits Increase Participation in the Federal EITC?," Public Finance Review, , vol. 48(5), pages 579-626, September.
    6. Jonathan Meer & Joshua Witter, 2022. "Effects of the Earned Income Tax Credit for Childless Adults: A Regression Discontinuity Approach," NBER Chapters, in: Tax Policy and the Economy, Volume 37, pages 175-198, National Bureau of Economic Research, Inc.
    7. Hoynes, Hilary & Rothstein, Jesse, 2016. "Tax Policy Toward Low-Income Families," Department of Economics, Working Paper Series qt87d6v10j, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    8. Luis Ayala & Milagros Paniagua, 2019. "The impact of tax benefits on female labor supply and income distribution in Spain," Review of Economics of the Household, Springer, vol. 17(3), pages 1025-1048, September.
    9. Laura L. Leets & Amber Sprenger & Robert O. Hartman & Nicholas W. Kohn & Juli Simon Thomas & Chrissy T. Vu & Sandi Aguirre & Sanith Wijesinghe, 2020. "Effectiveness of nudges on small business tax compliance behavior," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 3(2).
    10. Meiselman, Ben S., 2018. "Ghostbusting in Detroit: Evidence on nonfilers from a controlled field experiment," Journal of Public Economics, Elsevier, vol. 158(C), pages 180-193.
    11. Chlond, Bettina & Goeschl, Timo & Kesternich, Martin & Werthschulte, Madeline, 2024. "Transporting behavioral insights to low-income households: A field experiment on energy efficiency investments," Working Papers 0755, University of Heidelberg, Department of Economics.
    12. Nyman, Pär & Aggeborn, Linuz & Ahlskog, Rafael, 2023. "Filling in the blanks: How does information about the Swedish EITC affect labour supply?," Labour Economics, Elsevier, vol. 85(C).

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    More about this item

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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