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Are Individuals More Willing to Lie to a Computer or a Human? Evidence from a Tax Compliance Setting

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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.
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Vol.:(0123456789)
1 3
Journal of Business Ethics (2020) 167:157–180
https://doi.org/10.1007/s10551-019-04408-0
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 / Published online: 23 January 2020
© 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 per-
ceptions 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 choos-
ing to self-prepare their returns using tax software. Noting
advantages of electronic tax filing including enhancements
to service, efficiency, compliance, and enforcement, policy-
makers 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). Moreo-
ver, other statistics suggest individuals not only consider
tax software as a replacement for manual preparation using
paper forms, but also as a replacement for hiring tax profes-
sionals 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 (Lucas etal.
2014). For example, Turner etal. (2005) find individuals are
more likely to lie about using drugs when asked by human
rather than computer software interviewers. However, prior
research has not examined settings where the primary moti-
vation to lie is an economic gain (e.g., a larger tax refund),
and previous findings may not extend to this alternative set-
ting. Accordingly, the purpose of this study is to examine
whether individuals are more willing to tell economically
motivated lies to computers or to humans.
We predict individuals will be more willing to lie in
order to reduce their tax liability when interacting with tax
* Ethan LaMothe
Ethan.LaMothe@okstate.edu
Donna Bobek
Donna.Schmitt@moore.sc.edu
1 Spears School ofBusiness, Oklahoma State University, 402
Business Building, Stillwater, OK74078, USA
2 Darla Moore School ofBusiness, University ofSouth
Carolina, 1014 Greene Street, Columbia, SC29208, USA
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
... Evidence indicates that people behave less morally in the presence of AI. For example, people behave aggressively in public places (Brscic et al., 2015;Salvini et al., 2010), exhibit more dishonest behaviors (LaMothe & Bobek, 2020), and feel less guilty after cheating when interacting with AI, as compared to humans (Hoffman et al., 2015). Furthermore, Traeger et al. (2020) provided evidence that AI inhibits cooperation among human team members. ...
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