["Scottish Journal of Political Economy, EarlyView. ", "\nABSTRACT\nWealthy individuals exploit jurisdictional tax differences through mobility, challenging residence‐based tax systems—particularly via fictitious residency changes. We examine theoretically two countries competing to maximize tax revenues from wealthy individuals while auditing fraudulent residency claims. Taxpayers are shown to sort into non‐movers, illegal movers, and legal movers. We characterize equilibrium tax policies across varying conditions of mobility, country size, information exchange, and evasion sanctions. Our main finding is that stronger sanctions and information exchange both increase the optimal level of enforcement, reducing fraudulent tax relocations and increasing legal relocations, with an overall decline in total relocations.\n"]