Prior tax compliance research has largely ignored low-income individual taxpayers, as they have historically been viewed as having an immaterial impact on federal tax revenues. However, the earned income tax credit (eitc) program has altered the federal tax revenue landscape in this regard. The internal revenue service (irs) investigated the magnitude of eitc tax overpayments for tax year 1999 and concluded that between 27 and 31% of eitc filings were overstated, resulting in over-payments of between $8.5 and $9.9 billion (irs, 2002). These excessive payments represented about 0.5% of total federal revenues and 2.8% of the total tax gap. Thus, to the extent that low-income individual taxpayers intentionally under-report their incomes in order to receive higher eitc’s, the federal budget is noticeably affected.this study extends and complements extant tax research by examining the compliance intentions of low-income individual taxpayers. Relying on the theory of planned behavior, we examine the extent to which perceived tax equity (vertical, horizontal and exchange), normative expectations, and legal sanctions affect tax compliance intentions. Consistent with the hypotheses, the results indicate a significant positive relationship between compliance intentions and: (1) equity perceptions of the tax system; (2) normative expectations of compliance; and (3) penalty magnitude. Additionally, the findings suggest two-way interactions between penalty magnitude and exchange equity, and penalty magnitude and normative expectations. Research results reported herein hold important policy implications related to the federal government’s efforts to reduce tax cheating and increase compliance among low-income individual taxpayers.