When Does Tax Avoidance Result in Tax Uncertainty?
© 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., f...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
American Accounting Association
2021
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| Online Access: | https://hdl.handle.net/1721.1/135106 |
| _version_ | 1811070201882476544 |
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| author | Dyreng, Scott D Hanlon, Michelle Maydew, Edward L |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Dyreng, Scott D Hanlon, Michelle Maydew, Edward L |
| author_sort | Dyreng, Scott D |
| collection | MIT |
| description | © 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. |
| first_indexed | 2024-09-23T08:31:52Z |
| format | Article |
| id | mit-1721.1/135106 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T08:31:52Z |
| publishDate | 2021 |
| publisher | American Accounting Association |
| record_format | dspace |
| spelling | mit-1721.1/1351062023-12-08T20:54:03Z When Does Tax Avoidance Result in Tax Uncertainty? Dyreng, Scott D Hanlon, Michelle Maydew, Edward L Sloan School of Management © 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. 2021-10-27T20:10:46Z 2021-10-27T20:10:46Z 2019 2021-04-09T14:31:45Z Article http://purl.org/eprint/type/JournalArticle https://hdl.handle.net/1721.1/135106 en 10.2308/ACCR-52198 The Accounting Review Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf American Accounting Association SSRN |
| spellingShingle | Dyreng, Scott D Hanlon, Michelle Maydew, Edward L When Does Tax Avoidance Result in Tax Uncertainty? |
| title | When Does Tax Avoidance Result in Tax Uncertainty? |
| title_full | When Does Tax Avoidance Result in Tax Uncertainty? |
| title_fullStr | When Does Tax Avoidance Result in Tax Uncertainty? |
| title_full_unstemmed | When Does Tax Avoidance Result in Tax Uncertainty? |
| title_short | When Does Tax Avoidance Result in Tax Uncertainty? |
| title_sort | when does tax avoidance result in tax uncertainty |
| url | https://hdl.handle.net/1721.1/135106 |
| work_keys_str_mv | AT dyrengscottd whendoestaxavoidanceresultintaxuncertainty AT hanlonmichelle whendoestaxavoidanceresultintaxuncertainty AT maydewedwardl whendoestaxavoidanceresultintaxuncertainty |