Using IRS data to identify income shifting to foreign affiliates

• 成果类型: Article
• 署名作者: De Simone, Lisa; Mills, Lillian F.; Stomberg, Bridget
• 署名单位: Stanford University; University of Texas System; University of Texas Austin; Indiana University System; Indiana University Bloomington
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-019-9484-4
• 发表日期: 2019
• 页码: 694-730
• 关键词: MULTINATIONAL-CORPORATIONS; financial constraints; tax-avoidance; incentives; IMPACT

摘要

Income shifting is a significant source of tax planning for U.S. corporations. We use confidential Internal Revenue Service (IRS) data to develop a firm-year measure of income shifting. Our measure captures the relative extent of U.S. multinational entity (MNE) net intercompany payments out of the United States to CFCs. Our data show that the majority of sample firms report net inbound intercompany payments on average. Sample firms report nearly $830 billion of outbound payments and over $1 trillion of inbound payments in total. Companies reporting net outbound payments are smaller and operate in high-tech industries. Supplemental analyses show that firms with outbound intercompany payments have a lower rate of IRS audit and are no more likely to be assessed additional taxes upon audit. Our study provides a measure based on publicly available data that researchers, investors, and policymakers can use to infer outbound income shifting.