Title: The disconnect between tax laws, public opinion and taxpayer compliance: a study of the taxation of gambling winnings

Authors: Karl Bryan Menk; Brian Nagle; David L. Coss

Addresses: A.J. Palumbo School of Business Administration, Duquesne University, Rockwell Hall 922, 600 Forbes Avenue, PA 15228, Pittsburgh, Pennsylvania ' A.J. Palumbo School of Business Administration, Duquesne University, Rockwell Hall 922, 600 Forbes Avenue, PA 15228, Pittsburgh, Pennsylvania ' College of Charleston, The Beatty Center, Room 314, 66 George Street Charleston, SC 29424, USA

Abstract: The taxation of gambling winnings was considered unfair to taxpayers and regressive. The tax reporting intentions of casino patrons are rarely based on legal requirements, but instead on the amount of winnings and perception of tax laws. The underreporting of tax liabilities contribute to the 'tax gap'. This study examines materiality, casino patrons' tax knowledge, perception of taxation and perception of taxation of winnings as predictors of tax reporting intentions. Using regression, these variables contribute to predictive models of tax reporting intentions. The study found that materiality, overall tax perception and tax knowledge were significant predictors. The perception of the taxation of winnings was not a significant to the model. This study adds to tax evasion and compliance literature by providing information about the reporting intentions of casino patrons. A unique dataset using respondents that have not previously been included in tax studies was developed for the study.

Keywords: tax evasion; tax laws; taxpayer compliance; gambling income; tax perception.

DOI: 10.1504/IJCA.2017.088718

International Journal of Critical Accounting, 2017 Vol.9 No.3, pp.206 - 227

Received: 21 Apr 2017
Accepted: 16 May 2017
Published online: 15 Dec 2017 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article