Are Individuals More Willing to Lie to a Computer or a Human? Evidence from a Tax Compliance Setting
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ORIGINAL PAPER
Are Individuals More Willing to Lie to a Computer or a Human? Evidence from a Tax Compliance Setting Ethan LaMothe1 · Donna Bobek2 Received: 11 March 2019 / Accepted: 16 December 2019 © Springer Nature B.V. 2020
Abstract Individuals are increasingly switching from hiring tax professionals to prepare their tax returns to self-filing with tax software, yet there is little research about how interacting with tax software influences compliance decisions. Using an experiment, we examine the effect of preparation method, tax software versus tax professional, on willingness to lie. Results from a structural equation model based on data collected from 211 actual taxpayers confirm the hypotheses and show individuals are more willing to lie to tax software than a human tax professional. Our results also suggest this effect is jointly mediated by perceptions of social presence and the perceived detectability of the lie. Beyond the practical implications for tax enforcement, our findings broadly contribute to accounting and other literatures by examining the theoretical mechanisms that explain why individuals interact differently with computers versus humans. We also extend prior research on interactions between humans and computers by examining economically motivated lies. Keywords Human–computer interactions · Willingness to lie · Social presence · Tax compliance
Introduction Individuals have traditionally looked to tax professionals to help them complete their tax returns (Collins et al. 1990). However, an increasing number of individuals are choosing to self-prepare their returns using tax software. Noting advantages of electronic tax filing including enhancements to service, efficiency, compliance, and enforcement, policymakers in the United States (US) have required the Internal Revenue Service (IRS) to implement programs to increase tax software use (IRS Oversight Board 2014). In response, tax software use has grown tremendously in recent years to the point that a third of all individual US tax returns in 2017 were self-prepared using tax software (IRS 2017). Moreover, other statistics suggest individuals not only consider tax software as a replacement for manual preparation using * Ethan LaMothe [email protected] Donna Bobek [email protected] 1
Spears School of Business, Oklahoma State University, 402 Business Building, Stillwater, OK 74078, USA
Darla Moore School of Business, University of South Carolina, 1014 Greene Street, Columbia, SC 29208, USA
2
paper forms, but also as a replacement for hiring tax professionals to prepare their returns (IRS 2013; IRS Oversight Board 2014). Despite the growing popularity of tax software, research has yet to directly examine whether interacting with tax software instead of a human tax professional influences an individual’s tax compliance decisions. Prior research on computer–human interactions suggests an individual is more willing to lie to a human than to a computer when telling the truth reflects negatively on the individual (Luc
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