A New Approach to Assessing Observable Attributes of the Tax Compliance Behaviors of Small Business Owners

Measurements of individual behavior and attitudes are often based on the recall of respondents of actions that occurred in the past. These responses can often be biased due to incomplete or incorrect recall, or deliberate obfuscation by respondents. This paper discusses a new approach to data collection, through the use of a virtual reality environment, that allows researchers to collect data on respondents' tax decisions, at the moment they make them, through a simulation of a representative business year and subsequent tax preparation process. Disparate data can be collected and analyzed, providing researchers with greater reliability and validity in their research. A discussion of this data and potential implications on tax research is included.