Unintended Consequences of Linking Tax Return Disclosures to Financial Reporting for Income Taxes: Evidence from Schedule UTP

Towery, Erin

doi:10.2308/accr-51660

Cited by 110 publications

(48 citation statements)

References 26 publications

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“…We find no statistical difference in the overall adequacy or accuracy of reserves pre‐ and post‐FIN 48. This finding is broadly consistent with evidence in Robinson, Stomberg, and Towery () and Ciconte, Donohoe, Lisowsky, and Mayberry (), who find no improvement in the relation between tax reserves and cash taxes paid post‐FIN 48.…”

Section: Introductionsupporting

confidence: 90%

“…Schedule UTP requires firms to describe tax positions for which they recorded a reserve in their public financial statements. Towery () finds firms subject to Schedule UTP report lower tax reserves but do not pay more tax, suggesting Schedule UTP affects financial reporting quality. Therefore, we partition the post‐FIN 48 period into pre‐ and post‐Schedule UTP subperiods and reestimate our tests (untabulated).…”

Section: Sensitivity Analysesmentioning

confidence: 99%

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Does FIN 48 Improve Firms' Estimates of Tax Reserves?

Gleason

Mills

Nessa

2017

Contemporary Accting Res

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This paper examines whether the increased accounting guidance and reporting requirements of FIN 48 impact the adequacy and accuracy of tax reserves and the effect of auditor‐provided tax services on tax reserves. While we do not find FIN 48 affected the adequacy or accuracy of tax reserves on average, FIN 48 eliminated the differences in the tax reserve adequacy of firms with and without auditor‐provided tax services that existed prior to its adoption. We also find evidence of less premature releasing of tax reserves post‐FIN 48. Our evidence is consistent with an increase in the comparability of reserves for firms that do and do not purchase auditor‐provided tax services, consistent with one of the FASB's objectives for FIN 48.

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Section: Introductionsupporting

confidence: 90%

Section: Sensitivity Analysesmentioning

confidence: 99%

Does FIN 48 Improve Firms' Estimates of Tax Reserves?

Gleason

Mills

Nessa

2017

Contemporary Accting Res

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“…The OECD issued its report, Measuring and Monitoring BEPS, in October 2015, and China plans to localize the BEPS recommendations (PricewaterhouseCoopers 2015). Transfer-pricing issues have led to some of the largest U.S. tax settlements, and firms filing an IRS Schedule UTP (uncertain tax position) must disclose whether the position involves transfer pricing (Towery 2017). Lin et al (2012Lin et al ( , 2014, Lo et al (2010), andShevlin et al (2012) document that Chinese firms avoid subnational tax through domestic income shifting.…”

mentioning

confidence: 99%

Do Political Connections Weaken Tax Enforcement Effectiveness?

Lin

Mills

Zhang

et al. 2018

Contemporary Accting Res

137

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This paper examines whether ties to politicians by corporate boards of directors weaken the effectiveness of tax authorities in constraining tax avoidance in China. We use a unique data set to measure geographic time‐variant tax enforcement, including the probability of income tax audit, the expertise of tax officers, and the consequences of underreporting tax liabilities. Based on a sample of 11,121 firm‐years from 2003 to 2013, we find that the deterrent effect of the probability that a firm's taxable income understatement will be detected and lead to heavy penalties is significantly undermined if the board is politically connected. To enhance our analysis, we use opportunities for income shifting, the most likely mechanism through which Chinese firms avoid taxes on an ongoing basis, to illustrate how connected boards exert power to unwind the constraining effect of tax enforcement. Overall, our results suggest that a board's ties to politicians can be a significant challenge to the effective enforcement of tax compliance in a politically controlled economy.

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“…Por sua vez, as autoridades fiscais têm demandado uma maior transparência das atividades tributárias das empresas, que vão além da divulgação de informações rotineiras a padrões de relató-rios por país, country by country report (Towery, 2017).…”

Section: Introductionunclassified

Agressividade Tributária: Um Survey da Literatura

Martinez

2017

REPeC

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Objetivo e Método: o objetivo deste artigo é revisar os estudos internacionais e no Brasil sobre a agressividade tributária, esta entendida como o comportamento de tentar evitar ou minimizar o ônus tributário explícito para a corporação. Enquanto tema de pesquisa acadêmica, o tax aggressiveness ou tax avoidance revela-se em um tópico diversificado e vasto, embora relativamente recente. Resultados e Contribuições: Entre as perguntas de pesquisa que nessa temática se desenvolvem, destaquem-se a identificação de quais seriam os determinantes da agressividade tributária da firma, apreciando: (i) características das firmas; (ii) atributos ambientais; (iii) restrições de gatekeepers; e (iv) incentivos para as firmas. Revisam-se os determinantes da agressividade tributária dos gestores e a influência da governança e estrutura de controle. Adicionalmente, identificam-se as potenciais consequências econômico-financeiras da agressividade tributária para as firmas e as proxies empíricas existentes para mensurar a agressividade tributária. O estudo se encerra com a apresentação de oportunidades futuras de pesquisa na temática.

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Unintended Consequences of Linking Tax Return Disclosures to Financial Reporting for Income Taxes: Evidence from Schedule UTP

Cited by 110 publications

References 26 publications

Does FIN 48 Improve Firms' Estimates of Tax Reserves?

Does FIN 48 Improve Firms' Estimates of Tax Reserves?

Do Political Connections Weaken Tax Enforcement Effectiveness?

Agressividade Tributária: Um Survey da Literatura

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