NEGOTIATING STRATEGIES FOR TAX DISPUTES - PREFERENCES OF TAXPAYERS AND AUDITORS

Disputes between officials and citizens during tax enforcement differ from most civil disputes between citizens in several ways: They are in itiated when the official claims the citizen has not followed the law; they are fundamentally about the correct interpretation of the law; a nd the official has the formal power to end the dispute within the enf orcement arena by making a decision that is legally binding on the cit izen. Using data from pre-audit interviews with taxpayers and state ta x auditors, we explore how these characteristics of tax disputes, the roles of the parties, citizens' perceptions of the attitudes and orien tations of the officials, and other contextual factors drawn from regu latory and procedural justice research affect the strategies officials and citizens prefer for resolving disputes. We close with some eviden ce on the predictive relevance of the strategic preferences of the par ties in combination with their roles: For new resolutions to emerge, t he party with the power must be open to them, and the subordinate part y must have the assertiveness to present them. We also explorate how t he analysis may be extended to other enforcement and regulatory settin gs.