Document Type


Publication Date



compliance, enforcement, penalties


This essay responds to Alex Raskolnikov’s proposal to replace the current federal income tax compliance regime with a two-track approach based on taxpayer choice. The “deterrence regime” (DR) would be designed to be chosen by “gamers”, and the “compliance regime” (CR) would be designed to be chosen by all other taxpayers. Penalty rates would be significantly higher in the DR than in the CR. In this response, Lawrence Zelenak notes that the tax shelter disclosure rules of current law can also be viewed as a way of imposing a special compliance regime-featuring high odds of detection rather than high penalty rates-on gamers. Zelenak compares Raskolnikov’s proposal with the current regime, and suggests that there are plausible grounds for preferring the current regime to the proposal.

Library of Congress Subject Headings

Tax penalties