Tax Preparation Research Articles

Information frictions and learning dynamics: evidence from tax bunching in Ecuador

AbstractWe examine how taxpayers learn to minimize personal income tax payments in the context of a rapidly formalizing economy with an expanding tax base. Initially, take‐up of possible generous tax deductions is low among taxpayers in Ecuador who start working in the formal sector. With increasing duration of employment, however, taxpayers become more likely to bunch at the tax exemption threshold using deductions. We exploit rich administrative data on the universe of taxpayers in Ecuador and an event study design to provide causal evidence on the learning mechanisms. We find that the spread of information is driven by the mobility of workers and tax preparers across firms.

The tools of tax control: a conceptual perspective

This study focuses on exploring the areas of insufficient knowledge about tax control tools in public and private sector companies, in order to provide a more solid conceptual understanding of this topic. Qualitative and quantitative research was used, employing documentary review techniques and analysis of results, with workers from the Human Resources and Administration areas as a sample. A digital survey and data collection forms were used as research instruments. In summary, the results revealed a diversity of levels of familiarity and comfort with the use of accounting software, tax preparation and online tools provided by the tax agency.

Opinion shopping for tax advice: The effects of client narcissism, social bonds, and message framing

Contentious interactions can arise between a tax professional and client upon disagreement over a tax position. These interpersonal exchanges can lead to “opinion shopping” and represent a threat to voluntary tax compliance and the public interest. Opinion shopping is likely to increase in an era of rising narcissism because antagonistic narcissists are known to react aggressively to rejection of their views. To better understand drivers of opinion shopping, we conduct a quasi-experiment with 222 U.S taxpayers. We find clients with higher (lower) levels of antagonistic narcissism are more (less) likely to opinion shop and switch to another tax preparer. We also examine the efficacy of two theory-motivated moderators of client antagonistic narcissism: [1] tax professional – client social bonds and [2] persuasive messaging by the advisor. By doing so, we respond to calls to explore moderating influences on the undesirable effects of antagonistic narcissism while also providing novel insight into factors influencing taxpayer clients’ decision-making following interpersonal exchanges with a tax advisor. We find that while close social bonds and sanction warnings reduce opinion shopping among participants lower in antagonistic narcissism, they fail to do so among participants higher in antagonistic narcissism. Theory provides no basis for predicting a three-way interaction, and we find none. Contributions to the research literature, as well as implications for tax practice and policy internationally, are also discussed.

Computational Legal Studies Comes of Age

Computational analysis techniques are transforming empirical legal scholarship. Two paradigms have emerged: law-as-code, which seeks to represent legal rules in a logical, executable format; and law-as-data, which leverages quantitative analysis of legal texts to reveal patterns and insights. This article surveys these approaches, emphasizing recent developments in large language models and generative artificial intelligence (AI). Law-as-code systems have enabled applications from tax preparation software to smart contracts, but realizing the vision of fully computational law has proven challenging. Law-as-data techniques like natural language processing and machine learning have charted the semantic relationship between courts and illuminated changes in judicial culture. Generative models showcase AI's explosive progress, with impressive feats like passing the U.S. bar example, but they also highlight limitations like factual inaccuracy and interpretability issues. Hybrid approaches integrating computational law, data science, and AI offer a promising research direction. As these tools spread, legal scholars can analyze more legal data than ever before, but they must remain cognizant of challenges like biased or low-quality data and linguistic/cultural limitations. Used judiciously alongside traditional methods, computational analysis has the potential to revolutionize empirical legal studies.

Minimizing falsified financial reports

The study criticizes the way South Africa collects taxes from different segments of the population, primarily pensioners and workers with two sources of income. It also condemns the ineffective manner in which it administers some tax payouts, especially in the unfairness that has shown bias to some groups. Primarily, taxing of the pensioners is condemned, as well as the taxing of second earnings of employees, mainly where there were victims of the apartheid policies. The paper recommends taxing people with caution, in order not to perpetuate apartheid-initiated poverty of the South African masses of people, and in cases where earners who are being taxed could be having extra financial responsibilities. In order to resolve these problems, taxpayers and tax preparers should make sure that tax laws are applied correctly, that they are aware of the consequences of breaking the Generally Accepted Accounting Principles (GAAP), and that they routinely review and update their tax return positions in response to modifications to accounting standards and tax legislation.

The Gig Is Up: Examining Side Gig Income and Allowable Deductions

ABSTRACT The expansion of the gig economy has provided opportunities and challenges for tax professionals. In this case study, a rideshare driver receives a Form 1099-K for side gig income and seeks tax advice from a friend, ultimately deciding to consult with a tax professional (the student) for income tax preparation. The friend provides a video that describes misleading information giving the students a chance to consider authoritative sources as they research appropriate reporting on an individual income tax return. The case learning objectives are: (1) distinguish between credible and noncredible sources of information; (2) evaluate expenses and income to determine the taxable nature of each item; (3) analyze data for completeness in order to compile all relevant data needed for compliance reporting; (4) apply authoritative sources to resolve tax issues; (5) prepare an accurate individual income tax return; and (6) demonstrate effective written communication skills for business documentation.

ПОДАТКОВА ЗВІТНІСТЬ: СУТНІСТЬ ТА ПОРЯДОК СКЛАДАННЯ

The article analyzes the approaches of leading national scholars to the definition of the concept of "tax reporting". The author characterizes the necessity of tax reporting, since it characterizes the status of an enterprise's obligations related to the accrual and payment of taxes and other mandatory payments. Tax reporting is submitted to the tax authorities.
 The purpose of the article is to deepen theoretical research on the essence of the concept of "tax reporting", to disclose the methodology of its preparation with a view to improving its quality, reliability and objectivity.
 Summarizing the approaches of scholars to the essence of tax reporting, it is worth noting three approaches. According to the first one, tax reporting is considered as a set of documents containing information on the calculation of tax liabilities; according to the second one, it is considered as a set of actions of the taxpayer on preparation and submission of reports; according to the third one, it is considered as a set of consolidated interrelated indicators characterizing the activities of the enterprise for a certain period.
 Having studied the essence of the concept of "tax reporting", we propose to supplement Article 14 of the Tax Code of Ukraine with the following definition: tax reporting is reporting containing information on the tax liabilities of an enterprise by type of tax and fees.
 The Ministry of Finance of Ukraine regulates tax reporting by establishing forms of tax returns, calculations and reports by type of tax and fee.
 The tax reporting procedure can be divided into 4 stages: Stage 1 - selection of the required form of tax reporting in accordance with the type of tax/fee; Stage 2 - preparation of a tax return for the tax/fee, i.e., entering data directly; Stage 3 - verification of the document for correctness of preparation, compliance of the entered data with the accounting data, correctness of determination of the tax base, taxable object, tax rate; Stage 4 - signing of tax reports.
 Based on the study of tax reporting on national taxes and fees, it should be noted that not all forms contain information on the procedure for their preparation. For the preparation of individual forms by type of tax and fees, notes are used after the main part of the tax reporting. Therefore, we believe that the central executive body that ensures the formation and implementation of the state financial policy should develop recommendations on the preparation of tax reporting forms for those taxes and fees that do not have them, as this will contribute to better coverage of information on tax liabilities and significantly reduce the number of pages of tax reports.

ПОДАТКОВИЙ І БУХГАЛТЕРСЬКИЙ ОБЛІК: СПІЛЬНІ РИСИ І ВІДМІННОСТІ

In the current economic environment, both in Ukraine and in foreign countries, the issue of tax accounting is becoming increasingly acute. This is primarily due to the growing requirements of tax administrations both to the quality of tax reporting and to the growing requirements for real-time control and business operations of enterprises. At the legislative level, the concept of tax accounting and its principles are not clearly defined. On the other hand, the requirements for the preparation of tax reporting are clearly regulated. At the moment, there is a debate and controversy among scientists regarding tax accounting, some scientists consider tax accounting as a part of bookkeeping, while others argue that tax accounting has enough characteristics and features to be independent and go hand in hand with bookkeeping. The article analyses approaches and interpretations to the concept of "tax accounting" by various scholars, summarises and offers an interpretation of tax accounting. The paper conducts a comparative analysis of tax accounting and bookkeeping, identifies common and distinctive features. In particular, the primary source of information in both accounting is primary documents, which are the main information base on which certain transactions are recorded and which underlies the preparation of both tax and financial statements. To record business transactions, double entry is used in bookkeeping and tax accounting, and appropriate accounts are allocated for tax payments in the chart of accounts. The result of bookkeeping and tax accounting is reporting, in the first case financial and in the second case tax. The requirements for financial and tax reporting are regulated by different regulatory documents, and there is a difference between bookkeeping and tax accounting in the treatment of certain business transactions, in particular, the date of the VAT liability. The main users of tax reporting as a result of tax accounting are the state tax administration authorities, but there is a tendency that company officials use tax reporting along with financial reporting for the purpose of effective tax planning as one of the elements of the overall planning of the company's development. The publication examines the basic principles of bookkeeping in the context of their applicability to tax accounting, where they are more applicable, except for the accrual basis. It summarises the importance of tax accounting as a subject that requires more detailed research.

인공지능(AI) 기술의 세무업무 활용과 과제

Information and communication technology (ICT) is being utilized in various places, mainly in the Internet of Things (hereinafter referred to as IoT), depending on the degree of its development. Among these new technologies, artificial intelligence (AI) technology is progressing rapidly, and mobile-based translation apps and Internet recommendation functions are already in use in our surroundings. In line with this, tax authorities are moving tax procedures online through the enactment of laws and implementation of systems related to the construction of tax administration using ICT.
 It is not only silk tax accountants who are being forced to innovate due to the development of AI technology characterized by advanced information processing, but also professionals such as lawyers, legal consultants, and administrative consultants should establish their own duties. . In particular, since the tax field is related to a wide range of fields including individuals and companies, there is a need to seek bolder cooperation. Along with this, there is a need to actively utilize AI technology to improve operational efficiency. In the future, rather than AI taking away human jobs, I think AI will be left with simple tasks that it can do well, and tax accountants will concentrate on tasks that require advanced skills that only humans can do.
 Article 1 of the “Tax Judiciary” clearly states that the purpose is to establish a tax consultant system and ensure the smooth implementation of tax administration and the proper fulfillment of tax obligations. As long as there is a self-assessment tax system, it is important for our tax accountants to raise the public's tax awareness and encourage taxpayers to declare and pay their taxes. In addition, tax accountants, acting as taxpayers' agents, must deal with complex tax systems and ensure that appropriate tax payments are made even in cases where opinions differ on non-obvious issues. It is expected that some of the tax services that fall under the category of ancillary services will disappear. In the future, tax representation, tax document preparation, tax consultation, and the preparation of tax documents, which are the exclusive services of tax accountants, may no longer be necessary for tax returns that do not require complex tax procedures. Tax accountants, who perform tax-related representation and other activities in response to taxpayers' requests, will have to understand the demands of taxpayers over time and assume a new social role.

Does choice matter? The effect of filing method autonomy on taxpayer aggressiveness in a pre-filled tax return system

While pre-filled tax filing systems are the norm in many European countries, individuals in the U.S. are accustomed to the autonomy and control associated with preparing their own tax return. Taking that autonomy away by requiring individuals to use a pre-filled system could have negative consequences. Prior research has shown that implementing a pre-filled system in the U.S. may decrease compliance. Building on prior literature, results of an experiment manipulating filing method (traditional vs. pre-filled) and autonomy (present vs. absent) indicate that taxpayers who are given autonomy to choose the pre-filled system report significantly less aggressively than those forced to use it. Given that the Internal Revenue Service (IRS) revoked its promise not to compete with tax preparation software companies—opening the door for an IRS-created pre-filled filing system—this study has major implications for policymakers. Namely, policymakers would have to decide whether to make a pre-filled tax return system voluntary or mandatory. This study sheds light on the consequences of this policy decision.

Corporate Tax Management Strategy as an Effort for Good Corporate Governance

Tax preparation enterprises play a vital role in assisting people and corporations in comprehending and adhering to intricate tax legislation. Nevertheless, due to the escalating competition, tax preparation enterprises must embrace pertinent and groundbreaking marketing tactics in the Internet age. This study aims to examine and evaluate the execution of efficient marketing tactics within the tax preparation industry. This study employs a qualitative methodology utilizing descriptive techniques. The research findings indicate that implementing marketing tactics in the tax preparation industry favors enhancing brand visibility, recruiting new clientele, and fostering business expansion. Employing a blend of online and offline marketing tactics, such as content marketing and a dynamic social media presence, has expanded the reach to a broader demographic. SMART goal setting and KPI measurement facilitate the assessment of marketing initiatives' effectiveness, while data analysis using technologies such as Google Analytics yields valuable insights into customer behavior and market trends. Moreover, the computation of return on investment (ROI) enables firms to allocate expenditures in a resourceful manner, ascertain the most impactful marketing channels, and enhance the long-term viability of growth.

Implementing Marketing Strategies in the Tax Preparation Business

Tax preparation businesses are crucial in helping individuals and companies understand and comply with complex tax regulations. However, tax preparation businesses need to adopt relevant and innovative marketing strategies in the digital era and with increasing competition. This research aims to explore and analyze the implementation of effective marketing strategies in the context of tax preparation business. This research uses a qualitative approach with descriptive methods. The research results show that implementing marketing strategies in the tax preparation business positively impacts increasing brand presence, attracting new customers, and achieving business growth. Using a combination of digital and offline marketing strategies, including content marketing and an active presence on social media, has proven effective in reaching a wider audience. SMART goal setting and KPI measurement help measure marketing campaigns' success, while data analysis through tools like Google Analytics provides valuable insights into customer behavior and market trends. Furthermore, calculating return on investment (ROI) allows businesses to allocate budgets efficiently, identify the most effective marketing channels, and improve the sustainability of growth.

The Role of the Zimbabwean Government in the Implementation of Management Accounting among Small and Medium Enterprises

Purpose: This paper aimed to investigate the role of the Zimbabwean government in the implementation of Management Accounting Practices (MAPs) among Small and Medium Enterprises (SMEs). Management accounting is a crucial instrument for success, particularly for SMEs, according to earlier studies. The study noted that there is a dearth of literature on the government's support for the adoption of management accounting SME sector. Methodology: Semi-structured interviews were used to gather information from 88 participants. Zimbabwe has no SME database, hence, a chain referral sampling technique was used. The data were interpreted using qualitative content analysis. Findings: The study found that there is little that is done by the Zimbabwean government in promoting the use of management accounting among SMEs The areas covered in government-sponsored training for SMEs are bookkeeping, entrepreneurship, and tax preparation; management accounting is not addressed. Originality/Value: In order to increase public understanding of MAPs, the research advises the Zimbabwean government to conduct seminars, launch awareness-raising campaigns, and establish policies that encourage the use of management accounting.

The impact of online tax community advice on individual taxpayer decision making

In this study, we examine the impact of advice shared on an online tax community and taxpayer decision making. Online tax communities are linked to major tax preparation software and provide a way for taxpayers to ask unique questions and receive responses. While online communities are intended to facilitate the transmission of unbiased advice between individual taxpayers, the quality, content, and source of responses can greatly vary. Drawing on the predictions of expectancy violations theory (EVT), we investigate two facets of provided advice: response provider expertise and response language concreteness. Our results indicate that taxpayers report more conservatively (more aggressively) when presented with advice from a deemed tax expert if concrete language (abstract language) is used. Further, we find that taxpayers' perceived usefulness of the response mediates this relationship. Collectively, we contribute to EVT and provide evidence on the recognition and use of online tax community responses.

Pelatihan Pembuatan Dan Pelaporan Pajak UMKM Bagi Anggota Iwapi Kota Bandar Lampung

Community service activities to provide knowledge about MSME tax preparation and reporting training. this activity was carried out on May 3 2023. The method of activity is with presentation of material, discussion, training and evaluation. a series of community service activities as follows: the implementing team presented material on the Basic Principles of Imposing Final MSME Income Tax, tax incentives provided by the government to MSME actors, Calculation and Payment of MSME Final Income Tax, and Reporting of MSME Income Tax and Tax Sanctions. The result of this community service activity is that activity participants are capable of making and reporting MSME taxes

Income Tax Calculation Analysis At IBP Bandung Tax Consultant Office

In order to prepare corporate income tax at one of East Bandung's Accounting Services Offices, this research will look at the income tax article 21 computation using three ways (net, gross, and gross up). The study's focus is a business that offers services like bookkeeping, tax preparation, financial advice, and other related ones in Bandung. This study uses a qualitative approach method with additional quantitative information. The company's Article 21 PPh computation, salary information for permanent employees in 2022, and PPh regulations were all employed. The Gross Up method is the best and most effective method for business tax planning, according to the study's conclusions. The Gross Up strategy allows companies to offer tax incentives to their employees and can be used as a deduction from gross income, lowering the amount of corporate income tax owed. This study is only applicable to one company, and it can be developed by distributing questionnaires related to the article 21 income tax calculation calculation.

Who really matters in corporate tax?

Internal and external parties meaningfully shape corporate tax outcomes. However, we lack a holistic understanding of the major parties involved and their comparative effects. Using proprietary IRS data for public and private firms, we identify the top executives, corporate accountants, external accounting firms, and individual tax preparers and examine the comparative importance of these parties on corporate tax outcomes. We find that external individual tax preparers matter much more than the accounting firms that employ them. Internal actors (top accountants and executives) explain more of the variation in corporate tax outcomes than external actors (individual tax preparers and accounting firms). We also find some evidence that individuals’ characteristics are associated with the tax behavior of the corporations they serve. Overall, we conclude that some of the actors who are unobservable in public data play a greater role in corporate tax outcomes than parties that are a focus of prior research.

A Thematic Review on Accounting Conservatism And Corporate Tax Planning

Corporate tax planning as a strategy for minimising tax liability by companies has been frequently discussed. Many discoveries have been established by previous academics regarding the determinants of company tax planning. However, accounting conservatism is infrequently discussed in the context of company tax planning. Accounting conservatism is the accounting principle that businesses employ when preparing financial statements. Since tax reporting is dependent on audited financial statements, the choice of accounting principle impacts tax strategy. Thus, the main purpose of this paper is to examine the accounting conservatism patterns discussed by previous researchers. Using ATLAS.ti 22, the results report a thematic review analysis of the literature on accounting conservatism and taxation from 2000 to 2022. Keyword searches yielded 123 and 124 articles, respectively, in the Web of Science and Scopus databases. Nonetheless, only 22 articles were included for the analysis after being filtered based on inclusion and exclusion criteria. The analysis revealed a few studies that analysed the connection between accounting conservatism and company tax preparation. This finding highlights the significance of further research into the impact of accounting conservatism on the implementation of tax planning strategies.

Tax Software versus Paid Preparers: Motivations and Predictors for the Mode of Tax Preparation Assistance

SYNOPSISIn recent years, the number of taxpayers using tax preparation software has increased substantially; however, little is known about how these taxpayers differ from those using a paid professional. We gather data from a sample of taxpayers who used either tax software or a paid professional to examine their motivations for choosing their mode of tax preparation assistance. We find software users rated the importance of preparing the most accurate return significantly lower than the paid professional groups, while they rated the goal of minimizing the cost of preparation significantly higher in importance. We draw upon the Unified Theory of Acceptance and Use of Technology model to examine variables that predict the mode of tax preparation assistance. Results suggest measures representing performance expectancy, effort expectancy, and social influence are significant in distinguishing taxpayers using tax software from those using a paid preparer.

Can Ethics and Economic Incentives Mitigate Tax preparers’ Aggressive Judgements and Decisions?

ABSTRACT We examine whether the personal attribute of ethics and an external economic incentive in the form of a standard tax preparation fee can mitigate tax preparers’ aggressive tax reporting behaviour. We use a structural equation model (SEM) to identify the influential paths of ethics and economic incentives on the aggressiveness of tax preparers. Based on the results of a quasi-experiment involving tax preparers in Korea, we find that ethical attributes both directly and indirectly mitigate aggressive tax reporting by reducing tax preparers’ fear of client dissatisfaction. We then find that the introduction of a standard tax preparation fee does not directly or indirectly suppress the tax aggressiveness of tax preparers. Our study contributes to an integral examination of the effectiveness of both psychological and economic factors on tax preparers’ judgements and decisions.