Because tax revenue is crucial for modern societies, understanding tax compliance is essential. Existing theories offer only partial explanations. The most influential economic models make precise predictions about enforcement but ignore relevant psychological factors, while psychological theories lack specific predictions about tax compliance and especially conditions that foster trust. To overcome these limitations, we introduce a theory of tax compliance based on cognitive mechanisms for social exchange, including cheater-detection, revenge, and forgiveness. States collect taxes and in return provide goods and services. The theory predicts that when people attribute failures to provide goods and services to neglect (i.e., cheating, rather than unfortunate circumstances or incompetence), they feel exploited, lose trust, and reduce compliance. If they believe the state is non-valuable and likely to exploit them, this should trigger revenge or avoidance rather than forgiveness, resulting in lowered willingness to comply. Results from a cross-sectional survey of a representative UK sample (N = 300) are largely consisted with predictions. Confirmatory Factor Analysis revealed that respondents distinguished between active and passive neglect, circumstances, and incompetence as reasons for failures to provide goods or services. These reasons had distinct correlations with trust in the tax authorities. Trust in the tax authorities was negatively correlated with both active and passive neglect, and incompetence, while the correlation with circumstances was positive. Voluntary tax compliance was associated with lower motivation to avoid the state and greater willingness to forgive the state. These findings preliminarily suggest that interactions of taxpayers with the state are governed by the same psychological mechanisms that regulate social exchange between individuals. They further highlight the importance of designing tax institutions that are transparent and signal goodwill.