Journal of The American Taxation Association 

About: Journal of The American Taxation Association is an academic journal published by American Accounting Association. The journal publishes majorly in the area(s): Indirect tax & Tax credit. It has an ISSN identifier of 0198-9073. Over the lifetime, 338 publications have been published receiving 7278 citations.

The Influence of Tax and Nontax Costs on Book‐Tax Reporting Differences: Public and Private Firms

Abstract: We provide archival evidence on firms' book‐tax reporting differences using tax return data on public and private manufacturing firms. Prior research suggests that managers should report conforming book income to minimize tax‐related costs. However, reporting conformity can also impose nontax costs. We find evidence that public firms have generally higher financial‐reporting costs that result in larger book‐tax differences. In addition, we find that higher debt levels impose greater nontax costs on firms that are privately held or more financially distressed. Finally, our tests of differences among public firms suggest that nontax costs associated with bonus plan thresholds and book income patterns affect their book‐tax reporting. Our tests extend prior studies that focus on whether firms engage in specific conforming transactions. From a tax policy perspective, our results suggest that book‐tax differences may be a less useful indicator of private firms' aggressive tax positions because they have fewer i...

Religiosity and Tax Avoidance

Abstract: In this paper, we examine religiosity as one determinant of tax avoidance by corporate and individual taxpayers. Prior research suggests a relation between religiosity and risk aversion. Because aggressive tax avoidance strategies involve significant uncertainty and possible penalties and damage to reputation, we predict that higher levels of religiosity are associated with less aggressive (i.e., less risky) tax positions. Consistent with this prediction, we find that firms headquartered in more religious U.S. counties are less likely to avoid taxes. We also find that religiosity is consistently associated with lower tax avoidance by individual taxpayers, as measured by underreported income. These results hold after controlling for several firm-level, as well as county-level, demographic characteristics identified in prior research as affecting tax avoidance by corporate and/or individual taxpayers. We conclude that religiosity is a significant determinant of tax avoidance by corporate and indiv...

Perspectives on Corporate Tax Planning: Observations from the Past Decade

Abstract: Interest in corporate tax planning has accelerated in recent years as a combination of political, economic, and technological factors have fueled the public's awareness of corporate tax ac...

Do Managers Use the Valuation Allowance Account to Manage Earnings Around Certain Earnings Targets

Abstract: This paper provides additional evidence on earnings management via the deferred tax asset valuation allowance account (VAA). Earlier publications that do not find evidence of earnings management via the VAA examine contractual incentives using broad samples. A more recent publication finds evidence consistent with earnings management via the VAA but examines capital‐market‐based incentives using a homogeneous sample. To bridge the gap between these studies, we exploit a heterogeneous sample over an extended time period but examine capital‐market‐based incentives to manage earnings. The results provide substantial evidence that firms use the VAA to smooth earnings toward the mean analyst forecast. However, the results do not provide evidence that firms use the VAA to smooth earnings toward positive or prior year's reported earnings targets or engage in “big bath” behavior for any of the earnings targets.

An Examination of Reputational Costs and Tax Avoidance: Evidence from Firms with Valuable Consumer Brands

Abstract: We expect firms with the greatest exposure to reputational damage among consumers will engage in lower levels of tax avoidance to minimize unwanted scrutiny that could impair the firms' reputation. We identify a set of firms with valuable consumer reputation using Harris Interactive's EquiTrend survey, which surveys consumers about their perceptions of valuable and prominent brands. We find evidence in support of our hypothesis that firms with valuable brands will engage in less tax avoidance. Specifically, we find a positive and significant association between our measure of reputation and both the GAAP and cash effective tax rates (measured over one and three years). We find mixed evidence on whether there is a negative and significant association between reputation and the probability the firm is engaging in tax sheltering.