The World Bank Group conducted a study, using data from a number of surveys of businesses in developing countries, to investigate the association between the use of specialized tax software and total tax compliance costs. Most empirical data from both developed and developing countries show that use of tax software is associated with higher tax compliance costs. However, since larger and more sophisticated businesses are likely to both have higher tax compliance costs and use tax software, it is necessary to control for these and other firm characteristics. Regression analysis shows that it is indeed possible for tax software to reduce tax compliance costs, holding other variables constant, but the results are weak and often mixed. Many taxpayers apparently “over-use” the software in attempting to optimize their tax liabilities.