In 2010, the Internal Revenue Service (IRS) announced the requirement to disclose uncertain tax positions (UTP) on a new schedule (Schedule UTP) to be filed with federal corporate income tax returns. Schedule UTP could increase a firm's tax burden by providing a roadmap for the IRS to identify firms' tax-planning strategies. We find that stock returns around the development of Schedule UTP are negative, consistent with investors' concern that Schedule UTP would impose costs on firms. However, we document a significant positive stock price reaction to the release of the final draft of Schedule UTP in which the IRS relaxed many of the controversial provisions of Schedule UTP. Additionally, we find this positive reaction is incrementally larger for more taxaggressive firms. Finally, we find a significant decrease in reported unrecognized tax benefits (UTBs) and additions to UTBs after the adoption of Schedule UTP in 2010.
ChatGPT, a language-learning model chatbot, has garnered considerable attention for its ability to respond to users’ questions. Using data from 14 countries and 186 institutions, we compare ChatGPT and student performance for 28,085 questions from accounting assessments and textbook test banks. As of January 2023, ChatGPT provides correct answers for 56.5 percent of questions and partially correct answers for an additional 9.4 percent of questions. When considering point values for questions, students significantly outperform ChatGPT with a 76.7 percent average on assessments compared to 47.5 percent for ChatGPT if no partial credit is awarded and 56.5 percent if partial credit is awarded. Still, ChatGPT performs better than the student average for 15.8 percent of assessments when we include partial credit. We provide evidence of how ChatGPT performs on different question types, accounting topics, class levels, open/closed assessments, and test bank questions. We also discuss implications for accounting education and research.
During recent years, cryptocurrency has gained the attention of many large companies such as Facebook, Expedia, Apple, and Overstock to name a few. The acceptance and use of cryptocurrency in business transactions can have a major impact on a company's accounting system. However, accounting research exploring issues related to cryptocurrencies is sparse. Therefore, we identify research questions that the accounting profession should address concerning cryptocurrencies. We categorize these research questions using Rogers' theory of diffusion of innovation in an attempt to encourage and extend accounting research in cryptocurrencies to influence the design, development, adoption, implementation, and operation of the technology. We recommend that researchers take a more prescriptive approach to research, rather than a descriptive approach, given that cryptocurrency is in the infancy stage of development and adoption.
In 2010, the Internal Revenue Service (IRS) announced the requirement to disclose uncertain tax positions (UTP) on a new schedule (Schedule UTP) to be filed with federal corporate income tax returns. Schedule UTP could increase a firm's tax burden by providing a roadmap for the IRS to identify firms' tax-planning strategies. We find that stock returns around the development of Schedule UTP are negative, consistent with investors' concern that Schedule UTP would impose costs on firms. However, we document a significant positive stock price reaction to the release of the final draft of Schedule UTP in which the IRS relaxed many of the controversial provisions of Schedule UTP. Additionally, we find this positive reaction is incrementally larger for more taxaggressive firms. Finally, we find a significant decrease in reported unrecognized tax benefits (UTBs) and additions to UTBs after the adoption of Schedule UTP in 2010.
The IRS issued Notice 2014-21 in which they classify cryptocurrency as property. However, the variety and usage of cryptocurrency has increased since Notice 2014-21 so that cryptocurrency has become a significant and widely accepted component of the global financial system. Cryptocurrency includes a diverse group of digital assets with different origins and uses. One type of cryptocurrency, Bitcoin, has been adopted as legal tender in two countries. Yet the IRS guidance for reporting cryptocurrency has not changed. In this paper, we examine the current regulatory framework regarding cryptocurrency. Next, we discuss alternative tax treatments for cryptocurrency and the tax effects of those potential treatments. Finally, we make policy recommendations for the tax treatment of cryptocurrency.
Crypto assets are a diverse group of digital assets with different origins and uses that have become a widely accepted part of the global financial system. As the use of crypto assets has grown, IRS guidance related to their tax classification has not changed. Although the complexity of crypto assets increases the difficulty of regulation and taxation, the SEC and CFTC have asserted their authority and obtained rulings that challenge the current IRS guidance. In this paper, we examine the complexities of, and regulatory environment for, crypto assets to provide guidance on their tax classification. Then, we discuss possible tax classifications for crypto assets and the implications of those classifications. Our analysis of the complexity of crypto assets and their regulatory environment suggests that one tax classification for crypto assets is not sufficient. Allowing for different tax classifications provides more equitable tax treatment for users of crypto assets.
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