Using administrative tax records from Pakistan, we investigate behavioral responses to income tax notches-discontinuous jumps in tax liability-offering an unusual and compelling source of identifying variation. Notches create regions of strictly dominated choice where the taxpayer can increase consumption and leisure by lowering earnings to the notch point, and therefore produce very strong incentives for bunching. We find evidence of large and sharp bunching at notches, which is used to estimate taxable income responses, real earnings responses, and income shifting. A recent tax reform faciliates a comparison between the response to notches and the response to kinks created by discontinuous jumps in the marginal tax rate, and we find that the effects of notches are much larger and clearer. However, while the overall response to notches is large, it is fairly small in elasticity terms as the tax-price changes created by notches are extremely strong. In fact, we show that elasticities are too small to be consistent with the standard frictionless economic model, pointing to the presence of important optimization frictions. We explore the nature of such frictions and argue that they are likely to reflect a low degree of "tax literacy" - such as misperception and unawareness of tax incentives - in Pakistan.