Do Normative Appeals Affect Tax Compliance? Evidence from a Controlled Experiment in Minnesota

This paper explores one part of a 1994 Minnesota Department of Revenue field experiment designed to study the effectiveness of alternative enforcement strategies. Two letters containing different normative appeals were sent to two large groups of taxpayers; a control group received no letter. The impact of the letters on voluntary compliance is measured by comparing the change (for tax years 1994-93) in reported income and in taxes paid for treated versus control taxpayers (a difference-in-difference approach). We find little evidence of an overall treatment effect. However, the letters do appear to impact the compliance behavior of some groups of taxpayers.