Date of Award
Master of Business Administration (MBA)
Dr. Akinloye Akindayomi
Dr. Yun-Chia Yan
Mrs. Deborah Gonzalez
IRS tax audits are intended to curb tax evasion; however, they are costly to conduct and have negative impacts on taxpayers. The purpose of this study is to find out factors that lead to high IRS audit rate in a region from the perspective of the Rio Grande Valley (RGV). Relationship between IRS tax audit rate and determinants of tax evasion identified by Davis, Cebula, & Boylan (2020) among others are studied. A regression analysis is conducted on the regions scores on poverty rate, demography, unemployment rate and general level of education with the IRS audit rate. The results suggest that poverty, unemployment, and the level of education among taxpayers have a significant effect on the IRS audit rate of a region. However, demography was found to have an insignificant effect on the IRS audit rate. The study thus recommends that the local government and other stakeholders affected by the negative impacts of tax evasion and IRS audits, address these underlying factors by for instance, trying to alleviate poverty in the region, create more employment opportunities or increase general awareness through education. As this would help increase tax compliance and reduce IRS audits.
Guya, Issack, "Factors Affecting IRS Audit Rate Probability: Empirical Evidence from RGV Region" (2021). Theses and Dissertations. 882.