When Does Tax Avoidance Result in Tax Uncertainty?

• 成果类型: Article
• 署名作者: Dyreng, Scott D.; Hanlon, Michelle; Maydew, Edward L.
• 署名单位: Duke University; Massachusetts Institute of Technology (MIT); University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-52198
• 发表日期: 2019
• 页码: 179-203
• 关键词: Financial constraints; US; Aggressiveness; incentives; CONSEQUENCES; INVESTMENT; shelters; reserve; evasion

摘要

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.