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Muehlbacher, Stephan, Barbara Hartl, and Erich Kirchler. "Mental Accounting and Tax Compliance." Public Finance Review 45, no. 1 (August 3, 2016): 118–39. http://dx.doi.org/10.1177/1091142115602063.
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Azrina Mohd Yusof, Nor, Lai Ming Ling, and Yap Bee Wah. "Tax non-compliance among SMCs in Malaysia: tax audit evidence." Journal of Applied Accounting Research 15, no. 2 (September 2, 2014): 215–34. http://dx.doi.org/10.1108/jaar-02-2013-0016.
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Purpose – The pervasiveness of tax non-compliance remains a serious concern to most tax authorities around the world. The negative impact of tax non-compliance on the economy and the evolving nature of the Malaysian corporate tax system have motivated this study. The purpose of this paper is to examine the determinants of corporate tax non-compliance among small-and-medium-sized corporations (SMCs) in Malaysia. Design/methodology/approach – This study used economic deterrence theory to analyze and test 375 tax-audited cases finalized by the Inland Revenue Board of Malaysia in 2011. Findings – Multiple regression results revealed that marginal tax rate, company size and types of industry exerted significant effects on corporate tax non-compliance. The services and construction industries were noted to be the predominant industries engaged in tax non-compliance. The amount of concealed income unearthed during tax audit indicates clearly that there is widespread tax non-compliance in Malaysia and the quantum of tax lost through tax non-compliance is quite high. Research limitations/implications – This study only sampled SMCs audited in 2011, hence, care has been exercised in generalizing the findings. Practical implications – This study affirms that marginal tax rate, company size and types of industry are the main factors influencing compliance behavior of SMCs. The findings provide important insights not only to the Malaysian tax authority, but also to tax authorities and tax researchers in other parts of the world given that tax non-compliance of SMCs is a prevalent and universal problem. For example, with regard to the finding that marginal tax rate and company size are linked to non-compliance, it can be surmised that tax authorities ought to divert resources to firms with such characteristics when conducting audits. Originality/value – Most tax research tax examining corporate tax non-compliance used financial data from annual reports to predict tax non-compliance, which are not very accurate. This study used actual tax audit cases obtained from the tax authority which are reflective of the actual situation. This study complements the scant existing literature by empirically evaluating the factors that influenced corporate tax non-compliance in a developing country like Malaysia.
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Mills, Lillian F., Leslie A. Robinson, and Richard C. Sansing. "FIN 48 and Tax Compliance." Accounting Review 85, no. 5 (September 1, 2010): 1721–42. http://dx.doi.org/10.2308/accr.2010.85.5.1721.
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ABSTRACT: We develop a model to examine the effects of Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), on the strategic interaction between publicly traded corporate taxpayers and the government. Several of our findings contradict conjectures voiced by members of the business community regarding the economic effects of implementing FIN 48. Specifically, taxpayers with strong facts obtain higher expected payoffs from uncertain tax benefits and some disclosed liabilities understate the expected tax liability. Consistent with the common conjectures, however, some taxpayers are more likely to be audited or are deterred from entering into transactions that generate uncertain tax benefits because of FIN 48.
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Chong, K.-Rine, Yusniyati Yusri, Aslam Izah Selamat, and Tze San Ong. "Tax climate manipulation on individual tax behavioural intentions." Journal of Applied Accounting Research 20, no. 3 (September 12, 2019): 230–42. http://dx.doi.org/10.1108/jaar-01-2019-0001.
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Purpose The purpose of this paper is to extend the slippery slope framework by exploring different dimensions of compliance quality and tax minimisation under different tax climate manipulation by groups. Design/methodology/approach The authors run a random assignment of tax climate manipulations through questionnaire with 301 usable data collected from the full-time postgraduate students, employed individuals and self-employed individuals. Manipulation check and results are generated via multivariate analysis of variance. Findings The results confirm the biggest impact of synergistic climate on voluntary compliance, and small to medium impact of antagonistic climate on tax evasion across three groups. Research limitations/implications The manipulation of this research is constrained with two treatments in addition to the common pitfall of social desired responses of self-report. Practical implications Theoretically, this study empirically explores tax minimisation dimensions and provides new insights that only illegal tax minimisation is at maximum under the prevailing negative antagonistic climate, but not for legal tax minimisation. Second, the effect of tax climate represented by trust and power on enforced compliance is minimal, as compared to the strong effect of positive synergistic climate on voluntary compliance. As for policy implications, possible guidelines and interventions are outlined to policy makers which would lead to a better quality of compliance behaviour. Originality/value This study operationalises and manipulates tax climate from perceptions of trust, legitimate power and coercive power. It also further affirms the prior inconsistent findings in respect of tax behavioural intentions due to sampling group and cultural differences.
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Subadriyah, Subadriyah, and Puji Harto. "Determinants of personal tax compliance." Accounting 7, no. 7 (2021): 1675–80. http://dx.doi.org/10.5267/j.ac.2021.5.002.
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The largest state revenue comes from taxes. Even though the number of taxpayers is increasing from year to year, the tax revenue in Indonesia is still relatively low, since taxpayer compliance is still low. This study aims to determine the factors that influence individual taxpayer compliance in paying taxes at Jepara, Indonesia. The study uses a quantitative approach with a population of individual taxpayers who are registered at the tax office of Jepara, Indonesia. The number of samples is obtained by 100 respondents using the Slovin formula. The sampling technique was a convenience sampling technique. The data analysis method used is multiple regression analysis and Moderated Regression Analysis (MRA). Based on the test, it is found that the quality of tax authorities service, understanding and knowledge of taxation, tax sanctions, tax socialization, taxpayer awareness and perceptions of tax effectiveness have an influence on taxpayer compliance. In addition, the employment status of Civil Servants is more compliant in paying taxes since their income tax has been routinely deducted by the employer on the paid income.
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Davis, Jon S., Gary Hecht, and Jon D. Perkins. "Social Behaviors, Enforcement, and Tax Compliance Dynamics." Accounting Review 78, no. 1 (January 1, 2003): 39–69. http://dx.doi.org/10.2308/accr.2003.78.1.39.
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We analyze the effect of social norms and enforcement on the dynamics of taxpayer compliance. Specifically, we develop two models to evaluate the movement between classes of compliant and noncompliant taxpayers. Our analysis suggests that the effect on compliance of changing enforcement levels depends on whether the taxpayer population is initially compliant or noncompliant. Compliant populations are insensitive to changes in enforcement policies until enforcement becomes sufficiently lax, when we observe a sudden shift to high levels of noncompliance in equilibrium. In contrast, relatively noncompliant populations respond to increased enforcement by gradually increasing compliance. Then, when enforcement becomes sufficiently harsh, we find a sudden shift in equilibrium to very high levels of compliance. After the taxpayer population shifts from compliance to noncompliance, or vice versa, our models predict that returning to the previous enforcement policy will not cause the population to return to its previous state. On the whole, our models' results help explain why taxpayer compliance varies across time and across geographic regions, even under similar enforcement regimes.
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Boll, Karen. "Mapping tax compliance." Critical Perspectives on Accounting 25, no. 4-5 (July 2014): 293–303. http://dx.doi.org/10.1016/j.cpa.2013.03.002.
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Nahumury, Joicenda, I. Wayan Wisnu Utama, and Diah Hari Suryaningrum. "The Compliance of Motor Vehicle Taxpayers: An Experimental Research." Journal of Accounting and Strategic Finance 1, no. 2 (November 30, 2018): 163–76. http://dx.doi.org/10.33005/jasf.v1i2.44.
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This study aims to analyze the influence of motor vehicle taxpayers' trust in government authority and tax sanctions on motor vehicle taxpayer compliance. This research is experimental research with 76 accounting student participants who are taking a Taxation course. The analysis method uses ANOVA analysis. The results of the study prove that the trustworthiness of taxpayers with government authorities influences the compliance of taxpayers in carrying out their tax obligations. Conversely, tax sanctions do not affect taxpayer compliance. This result proves that taxpayers will be more compliant with their tax obligations if the government performs its functions as a state apparatus properly. The government with competent authority means that there is clear accountability about the use of tax returns; it can encourage the level of tax compliance.
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Ramdhani, Dadan, Wahyu Yulianto Wibowo, Popong Suryani, and Bima Prabowo. "Pengaruh Moral, Frekuensi Pelatihan Pelaporan Perpajakan, dan Norma Subjektif terhadap Kepatuhan Pajak Melalui Pemahaman Akuntansi pada Pelaku Usaha Mikro KPP Pratama Cilegon." STATERA: Jurnal Akuntansi dan Keuangan 1, no. 2 (October 25, 2019): 14–31. http://dx.doi.org/10.33510/statera.2019.1.2.14-31.
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The purpose of this study was to examine the effect of morale, frequency of tax reporting training, and subjective norms againts tax compliance through understanding accounting. This research was carried out at Kantor Pelayanan Pajak (KPP) Pratama Cilegon. This study uses primary data obtained from the questionnaire. The sample used in this study is a Micro, Small and Medium Enterprises Taxpayers registered at KPP Pratama Cilegon. The sampling technique used is purposive sampling. 145 questionnaires were distributed, and 145 questionnaires were returned. Data were analyzed using Statistical Product and Service Solution (SPSS) version 23. The results of this study indicate that morale, subjective norms and understanding of accounting have a significant effect on tax compliance, while the frequency of tax reporting training does not affect tax compliance. Morale and subjective norms do not affect the understanding of accounting, while the frequency of tax reporting training influences the understanding of accounting. Morale, frequency of tax reporting training, and subjective norms have no effect againts tax compliance through understanding accounting.
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Henderson, B. Charlene, and Steven E. Kaplan. "An Examination of the Role of Ethics in Tax Compliance Decisions." Journal of the American Taxation Association 27, no. 1 (March 1, 2005): 39–72. http://dx.doi.org/10.2308/jata.2005.27.1.39.
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The relationship between ethical beliefs and tax compliance is well documented, but extant research has not explored the relationships among general ethical beliefs, contextual ethical beliefs, and tax compliance behavior. In this study we propose a model that is intended to clarify the mechanisms through which ethical beliefs impact tax compliance. In the model, contextual ethical beliefs represent the mechanism through which individuals' general ethical beliefs impact tax compliance behavior. The model is tested using participants' ethical orientations as measures of their general ethical beliefs and using participants' ethical evaluations of others' tax compliance decisions as measures of their contextual ethical beliefs. Tax compliance behavior is inferred from participants' estimates of the likelihood that they would evade. Overall, the findings from our study support the proposed model. Ethical orientations are directly related to ethical evaluations; ethical evaluations directly predict tax compliance behavior; and finally, ethical orientations are indirectly related to tax compliance behavior. That is, ethical orientations influence tax compliance behavior, but only through their influence on ethical evaluations. We believe that the proposed model provides an important contribution by providing a framework that outlines the routes through which ethical beliefs impact tax compliance.
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Bhattacharjee, Sudip, Kimberly K. Moreno, and Debra A. Salbador. "The Impact of Multiple Tax Returns on Tax Compliance Behavior." Behavioral Research in Accounting 27, no. 1 (October 1, 2014): 99–119. http://dx.doi.org/10.2308/bria-50976.
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ABSTRACTTax compliance research has used prospect theory to describe taxpayers' behavior finding that taxpayers with pending payments due (loss frame) report more aggressively than taxpayers with pending refunds (gain frame). Since taxpayers often file multiple returns and prior research has only examined the impact of single returns on compliance behavior, we extend the research by incorporating the element of taxpayers filing multiple returns (state and federal returns). This study compares taxpayers' behavior in a single net refund or single net payment due condition versus a multiple refund (larger refund and smaller payment due) or multiple payments due condition (larger payment due and smaller refund). Using mental accounting theory, the results show that taxpayers' aggressiveness shifts up in a refund position when the refund is presented as multiple returns rather than a single net return. Taxpayers' aggressiveness shifts down when their payment due position is presented as multiple returns rather than a single net return. While the results in the single net return conditions were consistent with prior compliance research, the results in the multiple returns conditions show a shift in taxpayer aggressiveness from prior research where taxpayers were less aggressive in the multiple payment due condition than the multiple refund condition. A path analysis lends insight into these results by finding that taxpayers' compliance behavior in the single net return and multiple returns conditions is driven by their affective reactions to their tax position. These results suggest that prior tax compliance research that has not incorporated multiple returns may be missing an essential element of the decision environment. These results also extend the growing body of accounting research on mental accounting by providing some initial insight into the role of affect on behavior for single versus multiple outcomes.
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Cools, Martine, and Regine Slagmulder. "Tax-Compliant Transfer Pricing and Responsibility Accounting." Journal of Management Accounting Research 21, no. 1 (January 1, 2009): 151–78. http://dx.doi.org/10.2308/jmar.2009.21.1.151.
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ABSTRACT: While the accounting literature has extensively studied the role of transfer pricing (TP) within the management control system (MCS) of companies, MCS issues related to cross-border transfers have received far less attention. In this case study, we investigate how TP tax compliance influences responsibility accounting when one multinational enterprise (MNE) uses a single set of transfer prices for both tax compliance and management control. First, the MNE eliminated TP negotiation, leading to psychologically disagreeable and sometimes also economically harmful situations. Second, the firm administratively simplified the determination of profit margins to such an extent that it could lead to suboptimal business decisions. Third, tax compliance induced a profit-center designation for business units that were primarily responsible for costs or revenues. The firm first coped with a mixed treatment of these responsibility centers, allowing them to be profit centers for tax purposes and cost or revenue centers for MCS purposes. Later, top management became convinced of the benefits of a profit-center treatment for all purposes and started to convert the pro forma profit centers into real profit centers. Overall, this study contributes to the stream of research documenting and explaining how MCSs are designed and used under environmental pressures.
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Mattei, Marco Maria. "Regional tax compliance and tax motivated earnings management: evidence from the 2008 Italian tax reform." Corporate Ownership and Control 12, no. 1 (2014): 31–45. http://dx.doi.org/10.22495/cocv12i1p2.
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Using a large sample of public and private Italian companies, I investigate whether regional tax compliance affects earnings management activity in response to a decrease in the corporate tax rate. I find evidence that the higher the regional tax compliance where the company is based, the less managers engage in tax motivated earnings management. On the other hand, empirical results do not support the hypothesis that companies with an audit committee manage their earnings less in order to reduce their tax burden. Further analyses, however, show that the presence of an audit committee is relevant when interacted with the regional tax compliance. The impact of regional tax compliance on tax motivated earnings management declines when a company has an audit committee and this suggests a substitution effect between internal and external monitoring mechanisms. Finally, sensitivity tests show that both the intensity of earnings management for tax purposes and the effect of regional tax compliance are more material for small firms
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Farrar, Jonathan, Cass Hausserman, and Odette Pinto. "Trust and Compliance Effects of Taxpayer Identity Theft: A Moderated Mediation Analysis." Journal of the American Taxation Association 42, no. 1 (March 1, 2019): 57–77. http://dx.doi.org/10.2308/atax-52404.
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ABSTRACT We experimentally investigate how tax authority responsibility for preventing identity theft and tax authority responsiveness following identity theft influence taxpayers' trust in the tax authority and subsequent tax compliance intentions. We find evidence that trust mediates the positive relation between tax authority responsiveness and compliance, but that this mediation effect is conditional upon levels of tax authority responsibility for the identity theft. Specifically, when taxpayers perceive that the tax authority is to blame for the identity theft, higher responsiveness by the tax authority does not significantly influence compliance through trust. However, when the tax authority is not to blame for identity theft, higher responsiveness by the tax authority significantly influences compliance through trust. These findings suggest that when the tax authority is to blame for identity theft, there may be little it can do to increase taxpayers' trust and subsequent compliance.
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Jost, Sven P., Michael Pfaffermayr, and Hannes Winner. "Transfer pricing as a tax compliance risk." Accounting and Business Research 44, no. 3 (February 20, 2014): 260–79. http://dx.doi.org/10.1080/00014788.2014.883062.
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Sumianto, Sumianto, and Ch Heni Kurniawan. "ENGARUH PEMAHAMAN AKUNTANSI DAN KETENTUAN PERPAJAKAN SERTA TRANSPARANSI DALAM PAJAK TERHADAP KEPATUHAN WAJIB PAJAK ORANG PRIBADI USAHAWAN PADA UKM DI YOGYAKARTA." MODUS 27, no. 1 (March 20, 2016): 41. http://dx.doi.org/10.24002/modus.v27i1.567.
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This study aims to determine the efect of understanding of accounting and tax provisions and the tax transparency on tax compliance. This research was conducted on individual taxpayers SMEs in Yogyakarta. This study used a survey approach as collecting data method. The sample in this study was taken using purposive sampling method. Subjects in this study are individual taxpayers, particularly SMEs in Yogyakarta. Multiple regressions with Likert scale measurement were used as the analysis tools. One hundred respondents individual taxpayers entrepreneurs, especially SMEs in Yogyakarta were used as the respondents and the fnding of this study is that the understanding of the accounting and tax provisions comprehension positive efect on tax compliance. Researchers also found that transparency does not afect the taxpayer compliance.Key Words : Accounting Comprehension , Tax Policy, Transparency, Compliance
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Downing, Jeff, and John Christian Langli. "Audit exemptions and compliance with tax and accounting regulations." Accounting and Business Research 49, no. 1 (May 8, 2018): 28–67. http://dx.doi.org/10.1080/00014788.2018.1442707.
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Brink, William D., and Victoria J. Hansen. "The Effect of Tax Authority-Developed Software on Taxpayer Compliance." Accounting Horizons 34, no. 1 (July 1, 2019): 1–18. http://dx.doi.org/10.2308/acch-52511.
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SYNOPSIS We predict taxpayers who use tax software developed by tax authorities will be more compliant than those who use commercial tax software. Experiment 1 indicates that taxpayers who are shown by prior literature to be aggressive (those in a tax-due position) report less aggressively when they utilize tax software developed by the taxing authorities, compared to a commercial software package. Using tax software developed by tax authorities minimizes the difference in aggressiveness between taxpayers in a tax-due position and those in a refund position, mitigating the effects found in prior research. Results from Experiment 2 suggest that the identity of the software developer is key; placement of a tax authority logo on commercial software does not create the same effect. Experiment 2 also provides evidence that taxpayers assume a greater detection risk when using authority-developed software, accounting for some change in behavior. The results of this paper have implications for researchers, taxpayers, and policy makers.
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Fleischman, Gary M., and Teresa Stephenson. "Client Variables Associated with Four Key Determinants of Demand for Tax Preparer Services: An Exploratory Study." Accounting Horizons 26, no. 3 (March 1, 2012): 417–37. http://dx.doi.org/10.2308/acch-50167.
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SYNOPSIS There is a rich literature associated with the dichotomous decision to hire/not-hire tax preparation services. There is also some research assigning motivation to the decision to hire tax preparation services. However, no research has examined the underlying demographics and key perceptions of clients that do hire tax preparation professionals to determine which are associated with specific motivations to hire. We focus on the four most common motivations to hire a preparer found in extant literature (i.e., saving money, saving time, legal compliance, and protection from the IRS). Using survey data, we perform exploratory analysis using MANCOVA to discover what client demographics and perceptions underlie each motivation. Our most noteworthy finding is that client perceptions of tax advocacy are positively associated with all four focal motivations to hire. Our results also suggest that female clients, more than male clients, choose tax preparers with a desire to save time and to be legally compliant. In addition, taxpayers with children tend to be more concerned with legal compliance. We also find that taxpayers with relatively complex returns are less likely to hire a preparer to provide a legally compliant return and to gain protection from the IRS. Data Availability: The data are available from the authors upon request.
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Feltham, Glenn D., and Suzanne M. Paquette. "The Interrelationship between Estimated Tax Payments and Taxpayer Compliance." Journal of the American Taxation Association 24, s-1 (January 1, 2002): 27–45. http://dx.doi.org/10.2308/jata.2002.24.s-1.27.
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This paper examines taxpayers' compliance behavior and the tax agency's audit decision in a broader, more realistic, setting. Whereas prior research has taken the taxpayer's prepayment position as exogenous, this study extends the literature by incorporating the estimated tax payment decision into a tax compliance game. A two-period game-theoretic model is used to examine the effect that the estimated tax payment rules have on taxpayers' incentives to evade and on the tax agency's audit strategy. Our primary results are as follows. First, in equilibrium taxpayers' estimated tax payment decision will depend upon the uncertainty about their true tax liability, and the cost from overpayment (the taxpayer's cost of capital) or underpayment (penalty interest) of installments of estimated tax. Second, under reasonable assumptions, high-type taxpayers who make higher installments of estimated tax are less likely to lie about their level of income than those who make lower installments—that is, taxpayers who pay low are more likely to evade. Third, the tax agency audits taxpayers who have made low reports and low estimated tax payments with a higher probability than those who have made high estimated tax payments. The gain to the tax agency from auditing taxpayers who make lower payments and evade arises not only from the penalties charged for evasion, but also from the interest charged on deficient installments of estimated tax.
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Nguyen, Hien Thu. "Factors affecting tax compliance of small and medium enterprises in Hung Yen province, Vietnam." Accounting 8, no. 2 (2022): 111–22. http://dx.doi.org/10.5267/j.ac.2021.7.010.
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Corporate tax compliance has been an interest of policymakers in many countries. Taxes contribute the most to the government’s revenues in Vietnam in general and in Hung Yen in particular. Therefore, tax compliance of enterprises, including SMEs, attracts special concern of the Government and many localities. The objective of this study is to evaluate factors affecting tax compliance by examining 310 managers, tax accountants and accountants at SMEs in Hung Yen province. The survey data is collected by the statistical software SPSS 20. The experimental research results confirm that factors (the possibility of tax inspection, tax rates, tax penalties, and the complexity of tax policy, social norms and tax knowledge) have different influences on tax compliance in SMEs in Hung Yen province, Vietnam.
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Magro, Anne M. "Contextual Features of Tax Decision-Making Settings." Journal of the American Taxation Association 21, s-1 (January 1, 1999): 63–73. http://dx.doi.org/10.2308/jata.1999.21.s-1.63.
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Prior research in psychology and accounting suggests that features of the decision-making task and context affect information processing, yet the decision-making context is often ignored in tax judgment and decision-making research. Two primary decision contexts in the tax setting are planning and compliance. If these two contexts differ on significant features, the information processing of tax professionals in the settings also is likely to differ. An analysis of the characteristics of tax planning and compliance contexts suggests that planning problems are generally characterized by greater complexity, ambiguity, and justifiability demands than are compliance problems. Experienced tax professionals' knowledge of these differences in complexity, ambiguity, and justifiability demands of problems in the planning and compliance contexts was tested in an experiment in which decision-making context was manipulated. Each participant rated the complexity, ambiguity, and justifiability demands of six research cases. As predicted, participants in the planning condition rated the cases as higher in complexity, ambiguity, and justifiability demands than did participants in the compliance condition. Behavioral implications of these differences were demonstrated in that managers in the planning context budgeted significantly more time for staff to complete tax research than did those in the compliance context.
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Sanders, Debra L., Philip M. J. Reckers, and Govind S. Iyer. "Influence of Accountability and Penalty Awareness on Tax Compliance." Journal of the American Taxation Association 30, no. 2 (September 1, 2008): 1–20. http://dx.doi.org/10.2308/jata.2008.30.2.1.
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ABSTRACT: The Washington State Department of Revenue conducted a behavioral field experiment to increase use tax compliance within the construction industry. The study examined the effects of accountability and heightened sanction awareness on tax compliance. The results indicate that mandating firms to file an affidavit signed by the party responsible for reviewing use tax obligations increases compliance. Providing information regarding the penalty structure for noncompliance through an educational letter also increases use tax compliance, especially for firms with declining revenues. This latter finding is consistent with the findings of Jackson and Hatfield (2005). These results add to taxation literature by finding that inexpensive affidavits and mail-based education regarding tax sanctions can be effective.
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Siglé, Maarten, Sjoerd Goslinga, Roland Speklé, Lisette van der Hel, and Robbert Veldhuizen. "Corporate tax compliance: Is a change towards trust-based tax strategies justified?" Journal of International Accounting, Auditing and Taxation 32 (September 2018): 3–16. http://dx.doi.org/10.1016/j.intaccaudtax.2018.06.003.
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Dunbar, Amy E., and John D. Phillips. "The Outsourcing of Corporate Tax Function Activities." Journal of the American Taxation Association 23, no. 2 (September 1, 2001): 35–49. http://dx.doi.org/10.2308/jata.2001.23.2.35.
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This study investigates the factors associated with firms' decisions to outsource corporate tax-planning and -compliance activities. The results indicate that transaction costs relating to human-asset specificity, proprietary technology, and economies of scale, along with the status of firms' top tax professionals and recent growth, are factors that help explain variation in the proportion of 1997 tax-planning expenditures made to external service providers. In contrast, only firm size and growth help explain variation in the proportion of tax-compliance activities outsourced. Finally, the results indicate that firms with more of a tax-planning focus outsource greater (lesser) proportions of their tax-planning (-compliance) activities. These results provide the first empirical evidence relating to the economic motivations behind tax function outsourcing.
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MURRAY, MATTHEW N. "SALES TAX COMPLIANCE AND AUDIT SELECTION." National Tax Journal 48, no. 4 (December 1, 1995): 515–30. http://dx.doi.org/10.1086/ntj41789168.
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MILLS, LILLIAN F. "CORPORATE TAX COMPLIANCE AND FINANCIAL REPORTING." National Tax Journal 49, no. 3 (September 1, 1996): 421–35. http://dx.doi.org/10.1086/ntj41789215.
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ALM, JAMES, MICHAEL McKEE, and WILLIAM BECK. "AMAZING GRACE: TAX AMNESTIES AND COMPLIANCE." National Tax Journal 43, no. 1 (March 1, 1990): 23–37. http://dx.doi.org/10.1086/ntj41788822.
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Blaufus, Kay, and Franziska Hoffmann. "The effect of simplified cash accounting on tax and financial accounting compliance costs." Journal of Business Economics 90, no. 2 (September 3, 2019): 173–205. http://dx.doi.org/10.1007/s11573-019-00943-4.
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Yaniv, Gideon. "Tax Compliance and Advance Tax Payments: A Prospect Theory Analysis." National Tax Journal 52, no. 4 (December 1, 1999): 753–64. http://dx.doi.org/10.1086/ntj41789428.
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Spilker, Brian C., Ronald G. Worsham, and Douglas F. Prawitt. "Tax Professionals' Interpretations of Ambiguity in Compliance and Planning Decision Contexts." Journal of the American Taxation Association 21, no. 2 (September 1, 1999): 75–89. http://dx.doi.org/10.2308/jata.1999.21.2.75.
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A generally accepted finding from prior research is that in compliance decision contexts tax preparers exploit ambiguity in tax rules to help clients reach favorable reporting positions. Using an experiment with then Big 6 partners, senior managers and managers as subjects, this study accomplishes three objectives. First, by directly manipulating the level of ambiguity within a single tax scenario, this study confirms the result that tax professionals interpret ambiguity to the benefit of clients in compliance decision contexts. Second, this study provides initial evidence that decision context affects the way professionals interpret ambiguity. Specifically, the results suggest that tax professionals interpret ambiguity aggressively in compliance contexts, but relatively conservatively in planning decision contexts. Finally, this study provides evidence that tax professionals exploit precise tax rules to achieve client-preferred outcomes in planning decision contexts. These findings provide insights useful for understanding tax professionals' judgments and have potential tax policy implications.
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Jones, Christopher R., and Yuyun Sejati. "Improving Use-Tax Compliance by Decreasing Effort and Increasing Knowledge." ATA Journal of Legal Tax Research 11, no. 1 (March 1, 2013): 1–18. http://dx.doi.org/10.2308/jltr-50457.
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ABSTRACT We explore two remedies that could help states improve use-tax compliance. The first remedy is designed to reduce the amount of effort an individual must exert to pay the use tax by having the vendor give the individual an option to pay the use tax online. The second remedy focuses on increasing knowledge about the use tax by providing the individual with information about the use tax during the purchasing process. The results from two states, Florida and Illinois, indicate that providing an individual with the option to pay the use tax increases the likelihood that the person will comply with the use-tax law. Providing information about the use tax, however, increases the likelihood of compliance only in Florida. Finally, there is a marginally significant interaction effect between the two remedies in Illinois. This study makes three important contributions. First, this study offers policy makers two concrete and feasible solutions to the use-tax compliance problems for online transactions. Second, this study contributes to the academic literature by expanding the tax compliance literature into a relatively unexplored area. Finally, this study shows how use-tax compliance decisions and the effectiveness of potential remedies may vary from one state to another.
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Lipatov, Vilen. "Compatibility in tax reporting." European Journal of Management Issues 25, no. 2 (June 25, 2017): 92–102. http://dx.doi.org/10.15421/191713.
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Purpose – to describe a compliance-monitoring equilibrium in presence of compatibility costs in a setting when managers and other parties have different attitude towards compliance.
Design/Method/Approach. Classical game theory – Nash equilibrium.
Findings. If compatibility costs are small, there exist a unique stable Nash equilibrium of the game between the tax authority and a population of heterogeneous firms. In this equilibrium, the relation between compatibility costs and compliance is non-monotonic and depends on the curvature of auditing function. However, compatibility costs reduce non-compliance in low cheating regimes and may enhance it when many firms are cheating.
Limitations. The model is at high level of abstraction and neglects many important detail that characterize each field where it could be potentially applied.
Theoretical implications. The results provide one rationale for developing countries to be cautious with employing refined auditing schemes and for developed countries to promote complicated accounting procedures.
Originality/value. Compatibility costs are not previously considered in economic analysis of compliance.
Paper type – conceptual.
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Mills, Lillian F. "Pursuing Relevant (Tax) Research." Accounting Review 94, no. 4 (July 1, 2019): 437–46. http://dx.doi.org/10.2308/accr-10660.
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ABSTRACT Successfully producing relevant research requires investment throughout one's career to acquire fresh institutional knowledge, theories, and methods. In my case, almost a decade in public accounting launched multiple papers examining the tension between financial reporting and tax planning. Some of these papers directly generated new requirements for tax compliance (Schedule M-3) and indirectly influenced new financial reporting disclosures (FIN 48). As tax accounting researchers, we have the best competitive advantage in helping tax policymakers and tax authorities distinguish real effects from reporting effects. We can use that knowledge when analyzing the 2017 tax reform, especially with the help of the American Accounting Association (AAA) to build our professional networks.
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Sulfati, Andi. "The Influence of Understanding Tax-Accounting towards Compliance Tax Payers Business Entity in the Field of Industry (Empirical Study in North Makassar Tax Office)." Information Management and Business Review 7, no. 6 (December 30, 2015): 33–39. http://dx.doi.org/10.22610/imbr.v7i6.1180.
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Understanding of tax accounting has contributed greatly to the taxpayer compliance in meeting tax obligations. This study aims to determine the effect of accounting understanding of tax on tax compliance business entities in the field of industry in the North Makassar STO. The approach used in this study is descriptive-quantitative approach. The population in this study is all tax professional company manufacturing middle class listed on STO North Makassar, The sample in this study is the tax professionals who work for companies with criteria (1) have served at least one year, and (2) never fill SPT Agency. The sampling technique in this study using sampling techniques with incidental sampling method. Hypothesis testing using simple regression with the help of statistical software package for the social sciences (SPSS) version 22. Questionnaires were distributed utilizing an ordinal scale through a 5-point Likert Scale. Results from this study indicate that the value of the variable regression coefficient of understanding of accounting tax of 0.722 with t value of 8.832 is greater than the value that is equal to 2.040 t table so it can be stated that the understanding of tax accounting positive and significant (0.02
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Barrios, Salvador, Diego d'Andria, and Maria Gesualdo. "Reducing tax compliance costs through corporate tax base harmonization in the European Union." Journal of International Accounting, Auditing and Taxation 41 (December 2020): 100355. http://dx.doi.org/10.1016/j.intaccaudtax.2020.100355.
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Setiawan, Ade Budi, and Siti Meliana. "ANALISIS KEPATUHAN WAJIB PAJAK HOTEL BERDASARKAN PEMERIKSAAN PAJAK, SANKSI PERPAJAKAN, KONDISI KEUANGAN DAN PREFERENSI RESIKO PADA HOTEL-HOTEL YANG TERDAFTAR DI BAPPENDA KABUPATEN BOGOR." JURNAL AKUNIDA 3, no. 2 (December 29, 2017): 11. http://dx.doi.org/10.30997/jakd.v3i2.985.
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This research was aims to determine the influence of tax audit, tax penalties, financial condition and risk preference on tax compliance in paying taxes hotels at BAPPEDA (Revenue Service), Bogor. The population in this study are all registered taxpayer hotels in BAPPEDA (Revenue Service), Bogor .The sampling method used in this research is purposive sampling with criteria are accounting staff and tax professional of tax compliance in taxpayers hotels, who can’t reach tax revenue targets during 2014-2015. The datas in this study was obtained by distributing questionnaires to 52 respondents on tax compliance in taxpayer hotels in Bogor City. This study was tested by using multiple linear regression analysis with SPSS 20.00 for windows. Based on the analysis result, it can be concluded that tax audit, tax penalties and financial condition had positive influence on tax compliance in taxpayer hotels at BAPPENDA (Revenue Service), Bogor. While risk preference, hasn’t influence on tax compliance in taxpayer hotels at BAPPENDA (Revenue Service), Bogor.Keyword : Tax Audit, Tax Penalties, Financial Condition, Risk Preference, Tax Compliance, Hotels Taxpayer
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Arcand, Jean-Louis, and Grégoire Rota Graziosi. "Tax Compliance and Rank Dependent Expected Utility." Geneva Risk and Insurance Review 30, no. 1 (June 2005): 57–69. http://dx.doi.org/10.1007/s10836-005-1108-1.
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Cloyd, C. Bryan. "Discussion of Contextual Features of Tax Decision-Making Settings." Journal of the American Taxation Association 21, s-1 (January 1, 1999): 74–77. http://dx.doi.org/10.2308/jata.1999.21.s-1.74.
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Tax practice has evolved over the past decade from being predominantly concerned with tax compliance to a major focus on tax planning. Significant challenges for researchers interested in tax professional judgment and decision making (JDM) are (1) understanding the current environment of tax professionals, (2) identifying research questions that are relevant to this environment, and (3) appropriately capturing the essential elements of the current environment in the experimental setting. The research question addressed in Magro (1999) is related to this first challenge—understanding the current environment or context in which tax professional JDM occurs. Specifically, the research question addressed in this study is whether experienced tax professionals perceive differences between certain contextual features of tax-planning and compliance tasks.
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Damayanti, Theresia Woro, and Supramono Supramono. "Women in control and tax compliance." Gender in Management: An International Journal 34, no. 6 (August 5, 2019): 444–64. http://dx.doi.org/10.1108/gm-06-2018-0071.
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Purpose The study aims to empirically analyze the effects of the presence of female top managers and owners on corporate tax compliance. Design/methodology/approach Data for analysis were sourced from the World Bank Enterprise Surveys that involved 23,178 private firms in 98 countries. The surveys used a stratified random sampling method by using three criteria, namely, firm size, business sector and geographic region, within each country. Further, data are analyzed using the ordinal logistic regression and supported by the marginal effect analysis. Findings The results show that the presence of female top managers and owners is a significant factor that underlies the firm-level tax compliance difference when firms exhibit relatively lower compliance. Practical implications Although this study shows that the determinants of corporate tax compliance are very complex, there are also crucial roles of top managers and owners' gender. This study advises firms to use the gender equality strategy to generate the best human capital, especially in their top management levels. Besides, this study can be helpful in designing policies that facilitate women to reach top managerial levels or to own businesses as an alternative method to enhance tax compliance for developing countries that fail to generate optimal corporate income tax revenues. Originality/value To the best of the authors’ knowledge, no previous studies examine the effects of the presence of female top managers and business owners on firms’ tax compliance policies. This study contributes to extend the understanding of the important role of women in corporate strategic decision-making, especially in taxation policies in various developing countries.
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Khmelev, Sergey. "Problems of applying the principle of due diligence in the implementation of tax control in order to ensure the economic security of the enterprise." Russian Journal of Management 8, no. 4 (January 25, 2021): 51–55. http://dx.doi.org/10.29039/2409-6024-2020-8-4-51-55.
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The article deals with the problems of applying the principle of due diligence in the current activities of the organization in the implementation of tax control in order to ensure
the economic security of the enterprise in modern conditions of increasing the capabilities of information systems. Special attention is paid to the requirements of reliability of accounting and tax accounting. It is concluded that compliance with the strict requirements of the performance standards and innovations of Russian legislation on the tax records allows you to ensure the economic security of economic entity, for this purpose it is necessary to monitor the compliance of accounting policy for accounting purposes and for taxation purposes the requirements of the legislation of the Russian Federation on accounting and taxation, given the characteristics of economic activity of the enterprise. Emphasis is placed on the reliability of accounting and tax accounting. The principles of due diligence in the calculation of value added tax are important. It is stated that at present, there is no legally established definition of the principle of due diligence, which does not allow its extended interpretation by law enforcement agencies.
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Mohdali, Raihana, and Jeff Pope. "The influence of religiosity on taxpayers’ compliance attitudes." Accounting Research Journal 27, no. 1 (July 7, 2014): 71–91. http://dx.doi.org/10.1108/arj-08-2013-0061.
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Purpose – This paper aims to explore the role of religiosity in determining taxpayers’ attitudes towards tax compliance and discusses likely explanations for the findings in the context of the literature. Design/methodology/approach – A sequential exploratory mixed-methods research design was used in this study. Data were collected using a self-administered survey which involved approximately 300 individual taxpayers in Malaysia, followed by face-to-face interviews with 14 individual taxpayers. Majority of the respondents in both survey and interviews were salaried taxpayers, and the remaining were self-employed taxpayers. Findings – Religiosity is found to have a minimal but statistically significant positive impact on voluntary tax compliance. This probably can be explained by the strong religious values held by many Malaysians, as well as the concept of giving which has been emphasised in almost all religions. Research limitations/implications – Because this study did not differentiate between religious values and moral values in measuring the source of respondents’ internal values, there was a possibility that their internal values may be derived from both sources. Hence, comparing the impact of individuals’ religious values with individuals’ moral values that have no influence from religion on tax compliance is suggested for future research. Practical implications – A new mechanism is suggested to the Malaysian tax authority in regards to the treatment of religious payment to reduce the sense of inequality among citizens and taxpayers. Originality/value – This study enriches the limited literature of tax compliance from the perspective of developing countries, particularly Malaysia, and adds to the limited literature internationally from a religiosity perspective.
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FISHER, VICKIE L. "RECENT INNOVATIONS IN STATE TAX COMPLIANCE PROGRAMS." National Tax Journal 38, no. 3 (September 1, 1985): 365–71. http://dx.doi.org/10.1086/ntj41792033.
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DeZoort, F. Todd, Paul D. Harrison, and Edward J. Schnee. "Tax Professionals' Responsibility for Fraud Detection: The Effects of Engagement Type and Audit Status." Accounting Horizons 26, no. 2 (February 1, 2012): 289–306. http://dx.doi.org/10.2308/acch-50137.
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SYNOPSIS Despite a traditional advocacy role, tax professionals face growing pressure to help manage the tax fraud problem. However, the authoritative tax literature lacks explicit guidance in the area, motivating questions about the extent tax professionals perceive fraud detection responsibility. This study evaluates 236 tax professionals' perceived responsibility for tax fraud detection, and the extent that tax engagement type (planning versus compliance) and audit client status (audit client versus not an audit client) affect responsibility. We also use the triangle model of responsibility to test the extent that task clarity, professional obligation, and personal control mediate the effects of engagement type and audit client status on detection responsibility. The results indicate moderate and varied perceived detection responsibility among the participants. We also find that reported detection responsibility varies across tax engagement type and audit client status. As expected, tax professionals report higher detection responsibility in a tax compliance engagement and when the tax client is also an audit client. Subsequent path analysis results show that the triangle model components are positively related to detection responsibility, and that professional obligation and personal control mediate the effects of engagement type and audit client status on detection responsibility.
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Nichols, Nancy B., and Robert C. Richardson. "Criminal Investigations of Taxpayer Fraud." ATA Journal of Legal Tax Research 4, no. 1 (January 1, 2006): 44–58. http://dx.doi.org/10.2308/jltr.2006.4.1.44.
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Under the voluntary tax system in the United States, taxpayers are responsible for fully and accurately reporting and paying the amount of taxes owed. Voluntary tax compliance is reinforced through various programs including the document matching program, Internal Revenue Service (IRS) civil audits, and criminal prosecution. The Criminal Investigation (CI) division of the IRS is responsible for enforcing the criminal statutes. This article investigates the role of CI in tax compliance and analyzes the results of 598 published tax crime cases from 2000 through 2004. The results indicate that CI must increase its focus on cash economy small businesses. Additional recommendations include the expansion of tax withholding to nonemployee compensation and including payments to small businesses in the document matching program to reinforce the voluntary compliance system.
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Martins, António F. "Accounting information and its impact in transfer pricing tax compliance: a Portuguese view." EuroMed Journal of Business 12, no. 2 (July 3, 2017): 207–20. http://dx.doi.org/10.1108/emjb-11-2016-0029.
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Purpose In transfer pricing (TP) methods, especially when based on margins, accounting indicators are of paramount relevance to assess the profitability of firms, and to compare such indicators to samples of similar companies. The purpose of this paper, drawing on the legal research method, is to discuss the following questions: when using the transactional net margin, quite common in TP tax reporting, does the new (IFRS-based) Portuguese financial accounting system produce profit level indicators that are closer to the underlying reality that TP aims to capture, or are these profit level indicators of a lower quality than before? Design/methodology/approach The methodology used in the paper draws on legal research. The hermeneutical and evaluative approaches are used to answer the research question. The legal research method is often criticized by not making the empirical sciences’ type of generalizations, since many problems are, by nature, related to national legal systems and, therefore, proposed solutions are not valid outside a specific territory. However, given the nature of the accounting and tax issues identified and discussed in the paper the topic is relevant outside Portugal, given the widespread adoption of IFRS-based accounting systems and the multinational impact of TP principles’ and legislation. Findings The main conclusion is that the new accounting regime has a significant potential for increasing uncertainty and compliance costs in the area of TP, given the nature of operating income adopted in the new IFRS-based system. As such, taxpayers and tax authorities (TA) and tax courts will have to allocate more resources to an already complex and uncertain fiscal area. A careful analysis of non-recurrent items is now mandatory, given the increased flexibility and the amalgamation of recurring and non-recurring accounting items that can have a pernicious influence in TP tax compliance. The answer to the research question is that the new accounting system produces operating margins that, when used as profit level indicators in TP, are of lower quality. Practical implications Taking into account the aim of this study, the discussion of a Portuguese particular feature of corporate financial information and tax system can highlight useful policy points to a broader audience. Many OECD countries face a dire situation in budgetary terms. Therefore, given the pressure to increase tax receipts, TP issues can shed some light on solutions being applied in other countries, and enhance awareness of corporate tax policy points. Directive 2013/34/EU gives Member States some accounting flexibility (e.g. in the design of the income statement). Therefore, the authors would argue for a new design of the SNC’s income statement by the Portuguese legislators. The analysis also argues for a broader level of coordination and consultation between accounting standard setters and TA, in areas where a strong link exists between book and tax income. Originality/value The link between IFRS-based account systems and TP tax issues is not, to the best of the authors knowledge, a widely researched topic Thus, the paper adds value to the discussion related to book-tax relation in the specific area of transfer price profit level indicators. It finds a divergent path between the economic reality that TP tries to capture and a concept of operating margin that is affected by non-recurring and peripheral transactions.
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Boylan, Scott J., and Geoffrey B. Sprinkle. "Experimental Evidence on the Relation between Tax Rates and Compliance: The Effect of Earned vs. Endowed Income." Journal of the American Taxation Association 23, no. 1 (March 1, 2001): 75–90. http://dx.doi.org/10.2308/jata.2001.23.1.75.
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In this paper, we report the results of an experiment designed to determine whether the manner in which income is obtained (earned vs. endowed) affects the relation between tax rates and taxpayer compliance. Our experiment consisted of an income phase and a tax-reporting phase. In the income phase, participants were either endowed with $20 or were required to earn $20 by performing a one-hour multiplication exercise. In the tax-reporting phase, participants decided how much of their $20 in income to report on their tax returns. Consistent with prior experimental evidence, we find that when income is endowed, participants respond to a tax rate increase by reporting less taxable income. In contrast, but consistent with economic theory and some archival-empirical evidence, we find that when income is earned, participants respond to a tax rate increase by reporting more taxable income. Collectively, the results suggest that income is not a fungible commodity and that tax-payer responses to changes in policy variables such as the tax rate may depend critically on the amount of time and effort required to generate income. Additionally, our results may help explain differences between the results of taxpayer compliance experiments (which typically endow individuals with income) and archival-empirical studies (which use data that typically include earned income) regarding how changes in the tax rate (and other factors) affect taxpayer compliance decisions.
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Lois, Petros, George Drogalas, Alkiviadis Karagiorgos, and Aikaterini Chlorou. "Tax compliance during fiscal depression periods: the case of Greece." EuroMed Journal of Business 14, no. 3 (October 7, 2019): 274–91. http://dx.doi.org/10.1108/emjb-02-2019-0028.
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Purpose Governments count on tax revenues in order to finance their fiscal and social activities. The purpose of this paper is to analyse the citizens’ conception of tax compliance and examine the factors affecting tax behaviour. Design/methodology/approach This survey was conducted through a stratified sample and questionnaires consisted of closed-ended questions. A linear regression and a series of reliability tests including an analysis of variance were conducted with IBM Statistical Package for Social Sciences. Findings The majority of the respondents demonstrate a positive perspective towards tax compliance and tax administration employees that inspire it. However, while the fairness of the tax system is evident, findings indicate a deeper issue of social and behavioural influences, including the characteristics of tax administrative employees and tax morality. Research limitations/implications The findings are subject to over- or sub-representation, since the sample derived from groups whose occupations feature strong tax compliance. The study was conducted in Greece, and it is possible that the results can be generalised to developing countries with similar economic environments and fiscal circumstances. Practical implications Non-economic factors affect tax behaviour and the formation of modern tax strategies. This survey enables governments to improve tax compliance rates and increase tax revenues. Fiscal depression tends to decrease state revenues. Tax compliance factors should be taken into account through tax decision-making processes and ensure efficient tax collection. Originality/value This paper furthers the existent literature and deepens in non-economic factors of morality, revealing tax behaviours instigated by reasons beyond tax unfairness.
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De Simone, Lisa, Richard C. Sansing, and Jeri K. Seidman. "When are Enhanced Relationship Tax Compliance Programs Mutually Beneficial?" Accounting Review 88, no. 6 (June 1, 2013): 1971–91. http://dx.doi.org/10.2308/accr-50525.
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ABSTRACT: This study investigates the circumstances under which “enhanced relationship” tax-compliance programs are mutually beneficial to taxpayers and tax authorities, as well as how these benefits are shared. We develop a model of taxpayer and tax authority behavior inside and outside of an enhanced relationship program. Our model suggests that, despite the adversarial nature of the relationship, an enhanced relationship program is mutually beneficial in many settings. The benefits are due to lower combined government audit and taxpayer compliance costs. These costs are lower because taxpayers are less likely to claim positions with weak support and the government is less likely to challenge positions with strong support inside the program. Further, we show that an increase in the ability of the tax authority to identify uncertain tax positions makes an enhanced relationship tax-compliance program more attractive to both the taxpayer and the tax authority. JEL Classifications: H26
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Mei Tan, Lin, and Carrol Chin‐Fatt. "The Impact of Tax Knowledge on the Perceptions of Tax Fairness and Attitudes Towards Compliance." Asian Review of Accounting 8, no. 1 (January 2000): 44–58. http://dx.doi.org/10.1108/eb060720.
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