IRS and corporate taxpayer effects of geographic proximity

• 成果类型: Article
• 署名作者: Kubick, Thomas R.; Lockhart, G. Brandon; Mills, Lillian F.; Robinson, John R.
• 署名单位: University of Kansas; Clemson University; University of Texas System; University of Texas Austin; Texas A&M University System; Texas A&M University College Station; Mays Business School
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2016.09.005
• 发表日期: 2017
• 关键词: tax-avoidance; Aggressiveness; evasion; income; book

摘要

We investigate whether geographic proximity between corporate headquarters and IRS regional offices affects corporate tax avoidance and the likelihood and productivity of IRS examinations. Using geographic distance to represent information asymmetry, we find that corporations avoid more tax when located closer to the IRS unless they are close to an IRS industry specialist This finding is consistent with taxpayers believing proximity provides them with an information advantage over the IRS. From the perspective of the IRS, we find that the Service is more likely to audit nearby companies and to assess more tax per hour from nearby taxpayers, except during constrained budget years. IRS audit likelihood and productivity are unaffected by the presence of nearby industry specialists, consistent with industry specialist proximity already constraining avoidance. Our tax compliance setting provides dual-party evidence on the proximity-information asymmetry hypothesis. (C) 2016 Elsevier B.V. All rights reserved.