This study develops theory and discusses implications of inflexibility in tax-motivated income shifting. We show that inflexibility to adjust income-shifting strategies within a tax year in response to losses implies that income-shifting incentives are based on the expected rather than the...

We examine how tax cuts that benefit some firms are related to the economic performance of their direct competitors. Consistent with tax cuts decreasing the cost of initiating competitive strategies, we find that a decrease in the tax burden for only a specific group of firms in the U.S. economy...

Charles Boynton is a project manager at the IRS, Petro Lisowsky is an assistant professor of accounting at the University of Illinois at Urbana-Champaign, and William B. Trautman is a senior economist at the IRS. An earlier version of this paper was presented at the 2008 IRS Research Conference...