Voluntary Compliance

AAA

DEFINITION of 'Voluntary Compliance'

An assumption or principle that taxpayers will comply with tax laws and, more importantly, accurately report their income and deductions honestly.

INVESTOPEDIA EXPLAINS 'Voluntary Compliance'

This is one of those "ideal world" principles; for example, in an ideal world we wouldn't need police officers.

RELATED TERMS
  1. Compliance Program

    The internal programs and policy decisions made by a company ...
  2. Audit

    1. An unbiased examination and evaluation of the financial statements ...
  3. Income Tax

    A tax that governments impose on financial income generated by ...
  4. Loophole

    A technicality that allows a person or business to avoid the ...
  5. Tax Evasion

    An illegal practice where a person, organization or corporation ...
  6. Section 7702

    The section of the United States Internal Revenue Code that defines ...
Related Articles
  1. The Affordable Care Act is the largest change to the tax code in 20 years that could affect you when you file that 2014 tax return next year.
    Taxes

    How Might The Affordable Care Act Affect You?

    The Affordable Care Act is the largest change to the tax code in 20 years that could affect you when you file that 2014 tax return next year.
  2. The marginal tax rate is based on a progressive tax system.
    Personal Finance

    What's a Marginal Tax Rate?

    The marginal tax rate is based on a progressive tax system, where tax rates for an individual will increase as income rises. This method of taxation aims to fairly tax individuals based upon ...
  3. Taxes

    How are savings bonds taxed?

    Learn who is responsible for reporting U.S. EE savings bond interest for taxation and when the interest can be reported for proper taxation.
  4. Venezuela has more oil than anyone, and Brazil and Argentina have lots going for them, too, so why can't they get out of their own way economically?
    Economics

    Where NOT To Invest in Latin America

    Venezuela has more oil than anyone, and Brazil and Argentina have lots going for them, too, so why can't they get out of their own way economically?
  5. Retirement

    What are the Social Security tax caps?

    Learn how the Social Security tax cap works, what percentage of income is deducted for Social Security taxes and the history of Social Security tax changes.
  6. Credit & Loans

    Are credit card rewards considered taxable income by the IRS?

    Learn about when the Internal Revenue Service considers the financial value of gifts received from credit card reward programs to be taxable income.
  7. Retirement

    Are Social Security survivor benefits for children considered taxable income?

    Learn why receiving Social Security survivor benefits on behalf of children does not affect income tax for a surviving parent or guardian.
  8. Taxes

    Are fringe benefits direct or indirect costs?

    Learn how to allocate costs associated with fringe benefits provided to employees and how to determine when a cost is either direct or indirect.
  9. Retirement

    How much of my income goes to Social Security taxes?

    Discover how much of your income goes to social security tax: what the rate is, what the limits are and what types of income it is collected on.
  10. Don’t waste your time wading through the slew of private and corporate tax websites out there. Go straight to the source: IRS.gov.
    Taxes

    The Most Helpful Tools On The IRS.gov Website

    Don’t waste your time wading through the slew of private and corporate tax websites out there. Go straight to the source: IRS.gov.

You May Also Like

Hot Definitions
  1. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  2. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  3. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  4. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center