In this paper, we examine the theoretical and empirical implications of accounting for multiple modes of tax evasion. We fi nd that increasing the probability of detection in a given mode has an ambiguous effect on compliance in the targeted mode as well as the untargeted mode. In order to gain greater insight into taxpayer behavior, we use the 1985 TCMP to estimate an empirical model with two modes of evasion. We fi nd that increased enforcement effort has a positive effect on compliance in

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... targeted mode, a negative effect in the untargeted mode, and a positive overall effect on tax compliance.