Voluntary compliance is very important to a self-assessed tax system. Civil tax penalties play a significant part in encouraging voluntary compliance with the tax laws. The impact of penalties in tax administration is reflected in the large number of penalties the Internal Revenue Service is responsible for administering under the Internal Revenue Code. Voluntary compliance by taxpayers is more likely to occur if the belief exists that the tax code is applied fairly and consistently across all taxpayer classes. The government, professional stakeholders, administrators, and National Taxpayer Advocate have identified fair and equitable application of penalties. This quantitative research study examined the relationship between the abatement of penalties, taxpayer representation, and the type of tax return using ex post facto data from U.S. Tax Court opinions.
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