This study examines the effect on firm value of repealing the last-in, first-out (LIFO) inventory method for tax purposes. Our model extends prior literature by determining quantities and prices in equilibrium rather than specifying them exogenously. We find that LIFO repeal could increase the...

I examine differences between effective tax rates (ETRs) and book-tax differences (BTDs) as alternative measures of corporate tax avoidance or tax aggressiveness. When BTDs are scaled by pretax income, the scaled BTD is statistically equivalent to the ETR. When BTDs are scaled by assets the...

We investigate whether low Cash ETRs are associated with two distinct effects — tax avoidance and low earnings quality — and if so, whether the two effects can be separated. Separating these effects is important: if upward earnings management is driving low Cash ETRs, inferences based on tax...

This paper develops a model of dynamic tax planning in which the implementation of a tax plan involves exercising the option regarding an irreversible investment or financing structure choice. The model is applied to a common estate freeze tax plan. Undertaking an estate freeze requires a...

This study examines a setting in which a tax reporting decision is delegated to a firm 's tax manager. Using financial accounting measures of tax expense to evaluate the tax manager allows the fi rm to efficiently attain the level of tax avoidance it prefers, despite the fact that the...

This study investigates the circumstances under which “enhanced relationship” tax compliance programs are mutually beneficial to taxpayers and tax authorities, as well as how these benefits are shared. We develop a model of taxpayer and revenue authority behavior inside and outside of an...