Big Data Analytics in IRS Audit Procedures and Its Effects on Tax Compliance: A Moderated Mediation Analysis

Big data analytics could be a panacea for the IRS by enabling creation of taxpayer profiles to better capture noncompliance using artificial intelligence and machine learning, requiring fewer costly manpower hours. Privacy, fair information practices, and embedded biases are critiques of such practices, and it is unknown how taxpayers will respond. Deterrence theory suggests improved audit effectiveness will increase compliance but excludes elements of tax morale, including perceived fairness. We find evidence supporting a moderated mediation model where procedural fairness mediates the relationship between audit procedures and tax compliance, moderated by participatory monitoring, which captures how effects vary when taxpayers willingly increase traceability of their income by advertising online. When taxpayers advertise business online, use of advanced technologies in audit selection significantly increases compliance with no significant effect on perceived fairness; when they do not, use of advanced technologies has no effect on compliance, but significantly decreases perceived fairness.

A Data Protection Regime

This chapter is focused on the need for and the likely problems to be encountered as we pursue a regulatory response, especially through the traditional framework for thinking about privacy and data protection. This regulatory framework is characterized through a consideration of an evolving tradition beginning with the contributions that were made by Samuel Warren and Louis Brandeis in 1890. Other perspectives, including those of Edward Bloustein, which suggested the importance of dignity and other intangible injuries are explored. Links between privacy interests and interests in intellectual property emerged within legislative and regulatory concerns being raised about rights to information. Of particular importance are struggles over information rights as they apply to individuals and rights claimed by corporate actors, including those rights being claimed by corporate pursuit of First Amendment, or speech, rights. Distinctions are also drawn in this chapter between rights sought as defenses against actions taken by corporate actors versus those of governmental actors, given the fact that the First Amendment as a constraint applies only to agencies of government. A variety of specific cases and continuing struggles within the legal and regulatory environment are described, and due note is taken of the increasing influence of a neoliberal framing of a “marketplace solution” as the appropriate solution for conflicts over informational rights. The chapter concludes with a discussion of “Fair Information Practices” as a strategy for assigning oversight responsibility for informational regulation to a government agency. While there was expression of hope and desire for a governmental agency focused solely on privacy-related concerns, the creation of such an agency in the United States was not forthcoming.

Information Privacy, Cultural Values, and Regulatory Preferences

The global nature of e-commerce is complicating privacy issues because perceptions of privacy, trust, risk, and fair information practices vary across cultures, and differences in national regulation create challenges for global information management strategies. Despite the spike in international regulatory attention devoted to privacy issues and the tensions associated with them, there has been very little research on the relationship between information privacy concerns and consumers' regulatory preferences, and even rarer is research that incorporates cultural values into a framework that includes privacy concerns and regulation. This study examines privacy concerns, a full complement of cultural values, trust, risk, and regulation at the individual level in a cohesive manner. Relying on a dataset of consumers gathered in the United States and India, the authors test a model that incorporates these constructs as well as trust and risk beliefs. The model explains 48% of the variance in consumers' regulatory preferences, and all but one of the hypotheses find statistical support.

Sharing Tax Information in the 21st Century: Big Data Flows and Taxpayers as Data Subjects

In the last 10 years, governments have initiated several reforms to automatically exchange bulk taxpayer information with other governments (mainly via the Foreign Account Tax Compliance Act, the common reporting standard, and country-by-country reporting). This enhanced sharing of tax information has been encouraged both by technological change, including digitization, big data, and data analytics; and by political trends, including governments' efforts to reduce offshore tax evasion and aggressive international tax avoidance. In some cases, however, legal protections for taxpayer privacy and other interests are insufficiently robust for this emerging international sharing framework. Conceptually, taxpayers should be seen as "data subjects" whose rights are proactively protected by data protection laws and policies, including fair information practices. An optimal regime, which would balance the interests of taxpayers against those of tax authorities, should include a multilateral taxpayer bill of rights, a cross-border withholding tax that could be imposed in lieu of information exchange, and a global financial registry that would allow governments to identify the beneficial owners of business and legal entities.

China’s personal information protection in a data-driven economy: A privacy policy study of Alibaba, Baidu and Tencent

By examining the privacy policies of leading Chinese Internet and information service providers (IISPs), this study found their privacy policies to be generally compliant with China’s personal information protection provisions. These IISPs use proper mechanisms showing their commitment, measures and enforcement to data security, but their Fair Information Practices need improvement. Personal information protection in China is severe. Privacy policies offer more ‘notice’ than they do ‘choice’. Chinese IISPs collect and use information extensively in the guise of providing value to users, but have given insufficient consideration to transborder data flows and change of ownership. Societal and technological mechanisms have not been widely sought.

Privacy as Product Safety

19 Widener Law Journal 793 (2010)Online social media confound many of our familiar expectations about privacy. Contrary to popular myth, users of social software like Facebook do care about privacy, deserve it, and have trouble securing it for themselves. Moreover, traditional database-focused privacy regulations on the Fair Information Practices model, while often worthwhile, fail to engage with the distinctively social aspects of these online services.Instead, online privacy law should take inspiration from a perhaps surprising quarter: product-safety law. A web site that directs users' personal information in ways they don't expect is a defectively designed product, and many concepts from products liability law could usefully be applied to the structurally similar problem of privacy in social software. After setting the scene with a discussion of how people use Facebook and why standard assumptions about privacy and privacy law fail, this essay examines the parallel between physically safe products and privacy-safe social software. It illustrates the value of the product-safety approach by considering another ripped-from-the-headlines example: Google Buzz.

6. The death of privacy?

Privacy is under attack from several quarters. The ‘war on terror’ has amplified this pressure. The Internet, increased surveillance, and sensationalist journalism seriously undermine individuals’ control over their private lives. Many advocates believe that the protection of privacy stands in need of urgent renewal. Has the Internet sounded privacy’s death knell? The rapid advance of information technology, especially the Internet, has generated widespread concern about protection of personal data, with many jurisdictions adopting data protection legislation. Ironically, technology generates both the malady and part of the cure. While the law is rarely an effective tool against the dedicated intruder, advances in protective software, along with fair information practices of the European Directive and laws of several jurisdictions, afford a rational and sound normative framework for the collection, use, and transfer of personal data. Some of these questions—likely to dominate 21st-century discussions of privacy—are considered in this concluding chapter.