When Does Tax Avoidance Result in Tax Uncertainty?
Name
SSRN-id2374945.pdf
Description
Accepted version
Size
626.01 KB
Format
Adobe PDF
Checksum (MD5)
edf0f474a3968008502c9a52252e1079
Author(s)
Dyreng, Scott D
Hanlon, Michelle
Maydew, Edward L
Date Issued
2019
Journal
The Accounting Review
Publisher
American Accounting Association
Version
Author's final manuscript
Abstract
© 2019 American Accounting Association. All rights reserved. We investigate the relation between tax avoidance and tax uncertainty, where tax uncertainty is the amount of unrecognized tax benefits recorded over the same time period as the tax avoidance. On average, we find that tax avoiders, i.e., firms with relatively low cash effective tax rates, bear significantly greater tax uncertainty than firms that have higher cash effective tax rates. We find that the relation between tax avoidance and tax uncertainty is stronger for firms with frequent patent filings and tax haven subsidiaries, proxies for intangible-related transfer pricing strategies. The findings have implications for several puzzling results in the literature.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.2308/ACCR-52198
