When Does Tax Avoidance Result in Tax Uncertainty?

摘要

Accounting; researchers have been studying tax avoidance for decades, with the usual definition of tax avoidance including a broad range of tax-reduction activities, ranging from standard tax-advantaged investments (e.g., tax-exempt municipal bonds) to aggressive strategies that might not be upheld if challenged. Tax authorities may challenge certain forms of tax avoidance and ultimately prevail. The authors refer to the possible loss of tax savings from an I.R.S. challenge as tax uncertainty. Their goal in this study is to provide evidence on the relation between tax avoidance and tax uncertainty, with the specific measures of these constructs being important.