The Distribution of Sentences in Tax-Related Cases: Explaining Success Rates

Abstract

Using a sample of over 1,200 tax-related cases from Spanish Courts of Appeals, and the multimodal approach recently proposed by Kessler, Meites, and Miller (1996), we attempt to isolate the factors that determine the government's success rate at trial. We argue that the variability of this rate should be explained by five multimodal characteristics (the settlement option, the plaintiffs' risk aversion, information asymmetries, the role of intermediate courts, and litigation costs), and find that the data largely supports our model.

JEL Classification: K14, K34