They’re expressive---the signal’s strong.
Blank ’21 [Joshua and Ari Glogower; revised June 7; Professor of Law at the University of Irvine School of Law, JD from Harvard Law School, LLM in Taxation from New York University School of Law; Professor of Law at Ohio State University, JD in Tax Law from New York University; New York University Law Review, “Progressive Tax Procedure,” vol. 96]
Tax procedure covers a broad set of rules with varying functions. Some tax procedure rules have a “deterrent” function by encouraging taxpayers to comply with the tax laws. For instance, the civil penalties for failure to file returns or pay taxes,14 for accuracy-related underpayments,15 and for fraud16 encourage compliance by increasing a taxpayer’s expected cost from noncompliance.17 Other tax procedure rules have a “compensatory” function. The rules for interest charges on late payments of tax liabilities,18 for example, can be understood as compensating the government for the taxpayer’s use of its funds (much like private party interest compensates a bank for the borrower’s use of its loan proceeds). Other tax procedure rules—such as the statutes of limitations and the taxpayer appeal rights— advance general goals of procedural fairness, similar to in other areas of procedural law.19 Tax procedure rules may also be understood as having an explicit “revenue raising” function, since they can increase the final tax burden paid by taxpayer’s subject to these rules.20 Finally, some tax procedure rules have an “expressive” function in signaling the standards for taxpayer compliance and for fair treatment in tax administration.21