IRS scrutiny and corporate innovation

IF 3.2 3区 管理学 Q1 BUSINESS, FINANCE
Nathan Goldman, Niklas Lampenius, Suresh Radhakrishnan, Arthur Stenzel, Jose Elias Feres de Almeida
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Abstract

The IRS administers tax laws enacted by Congress. As part of the IRS's duties, they often consider taxpayers' financial statements to help ensure accurate tax reporting and payments. We posit that enhanced financial statement disclosures of tax information under FASB Interpretation Number 48 (FIN 48) lead to more IRS scrutiny and alter the incentives for corporate innovation. Using patent applications as a measure of corporate innovation, we employ a difference-in-differences research design with publicly listed US firms as the treatment group and privately held US firms not subject to the disclosure requirements as the control group. We find robust evidence that, following the onset of FIN 48, the number of patent applications by publicly listed firms decreased between 15.4% and 24.3% relative to private firms. This decline in patent applications is attributable to incremental innovation, suggesting that firms lower innovation related to projects with tax benefits that are more likely to be scrutinized by the taxing authorities. These findings suggest that there are real effects of IRS scrutiny and, in particular, real effects of tax disclosures under FIN 48 on corporate innovation.

Abstract Image

国税局审查与企业创新
国税局负责执行国会颁布的税法。作为国税局职责的一部分,他们经常审议纳税人的财务报表,以帮助确保纳税申报和纳税的准确性。我们认为,根据财务会计准则委员会第 48 号解释(FIN 48)加强财务报表对税务信息的披露会导致国税局进行更严格的审查,并改变企业创新的动力。以专利申请作为企业创新的衡量标准,我们采用了差额研究设计,将美国上市公司作为处理组,将不受披露要求约束的美国私人控股公司作为对照组。我们发现了强有力的证据,表明在 FIN 48 法案实施后,与私营企业相比,上市公司的专利申请数量减少了 15.4% 到 24.3%。专利申请数量的下降可归因于增量创新,这表明企业降低了与税收优惠项目相关的创新,而这些项目更有可能受到税务机关的审查。这些研究结果表明,美国国税局的审查,尤其是 FIN 48 规定的税务披露对企业创新有实际影响。
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来源期刊
CiteScore
6.20
自引率
11.10%
发文量
97
期刊介绍: Contemporary Accounting Research (CAR) is the premiere research journal of the Canadian Academic Accounting Association, which publishes leading- edge research that contributes to our understanding of all aspects of accounting"s role within organizations, markets or society. Canadian based, increasingly global in scope, CAR seeks to reflect the geographical and intellectual diversity in accounting research. To accomplish this, CAR will continue to publish in its traditional areas of excellence, while seeking to more fully represent other research streams in its pages, so as to continue and expand its tradition of excellence.
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