Law Firms as Tax Planning Service Providers

• 成果类型: Article
• 署名作者: Acito, Andrew A.; Nessa, Michelle
• 署名单位: Virginia Polytechnic Institute & State University; Michigan State University; Michigan State University's Broad College of Business
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0712
• 发表日期: 2021
• 页码: 1-26
• 关键词: Financial constraints; accounting practices; general counsel; expertise; avoidance; SPREAD; IMPACT

摘要

We provide large sample evidence of law firms facilitating U.S. publicly traded companies' tax planning, investigate when evidence of law firm involvement is strongest, and examine some tax planning mechanisms law firms facilitate. Because companies' tax planning relationships with law firms are not publicly observable, we use litigation filings and SEC comment letters to identify companies' observable law firm relationships. We find a positive association between companies' tax planning and the average tax planning of other companies that have a relationship with the same law firm. This association is stronger for companies that are smaller, younger, R&D-intensive, financially constrained, and facing less capital market pressure, but does not vary with auditor-provided tax services. We also find evidence consistent with law firms facilitating the use of tax havens, Double Irish structures, and special purpose entities. Our findings deepen our understanding of companies' tax planning ecosystems.