The probability of errors in tax returns has not been modeled explicit
ly before. However, corrections on individual tax returns, made by the
fiscal authorities, may be related both to tax evasion and to errors
made by the taxpayers. The probabilities of detecting tax evasion (tru
e positives) and errors in tax returns (partly interpreted as false al
arms) are specified and parametrized by variables known from the liter
ature. In an empirical survey, the response to a questionnaire has bee
n combined with information from the tax administration regarding tax
returns. Taxpayers' willingness and ability to conceal income from the
tax authorities are key factors with respect to tax evasion. Furtherm
ore, the model enables the estimation of tax evasion probability, give
n the level of education and the opportunity to conceal income. The pr
obabilities of tax evasion and errors could be explained to some exten
t.