Tax Settlements Research Articles

The Effect of Managerial Ability on the Market Valuation of Unrecognized Tax Benefits

This study examines the effect of managerial ability on the market valuation of unrecognized tax benefits (UTBs). While UTBs are generally associated with significant risks, we hypothesize that highly able managers can enhance the market valuation of the UTBs through their ability and efforts to report high-quality UTBs and retain the economic benefits of tax strategies. Consistent with our expectations, we find that managerial ability positively moderates the relationship between UTBs and firm values. Our additional analyses show that highly able executives can reduce firms’ future overall tax risk and tax settlements. Collectively, our findings suggest that the stock market values UTBs positively in firms managed by highly capable executives who can minimize tax risks while lowering tax payments.

Tax Indemnification and Unrecognized Tax Benefits in Mergers and Acquisitions

ABSTRACT Tax indemnification transfers the risk of potential tax settlements from a taxpayer to an external party. Current accounting standards require firms to reflect unrecognized tax benefits (UTBs) even when the underlying tax position has indemnification. Practitioners suggest that financial statement disclosures regarding tax indemnification are necessary to allow users to assess tax risk adequately. However, acquirers rarely disclose tax indemnification arrangements from merger and acquisition (M&A) contracts. Evidence suggests that tax indemnification attenuates the positive association between UTBs and future tax cash outflows. Moreover, results are consistent with indemnification agreements resulting in minimal settlements. Because of the effect that removing accounts associated with lapsed indemnification agreements has on effective tax rates and the attenuating effect that indemnification has on UTB’s association with future tax cash outflows, the findings could be of interest to the Financial Accounting Standards Board regarding their income tax disclosure project. JEL Classifications: M48; M41; G34.

The tax dimension of corporate social responsibility, including recognising CSR expenses in income tax settlements

Purpose: The article presents the scope of disclosed information relating to tax issues in non-financial reports, including corporate social responsibility (CSR) expenses and how they are recognised when settling corporate income tax.Methodology/approach: Firstly, based on a study of the literature and legal regulations, the tax issues under CSR are addressed, CSR expenses are characterised, and how they are recognised in corporate income tax settlement is discussed. Secondly, an empirical study was conducted based on the content analysis of non-financial reports of entities included in the WIG 20, excluding banks and insurers, in terms of tax disclosures, including CSR expenses.Findings: The surveyed companies rarely refer to tax issues in their non-financial reports. Furthermore, they do not disclose the tax benefits related to the expenses of CSR. Based on the research, it can be concluded that CSR should be extended to tax issues, but it is not necessary to designate a separate area.Originality/value: In the literature, little is known about tax issues in CSR, although tax solutions are increasingly being introduced to encourage enterprises to behave socially responsibly. Therefore, the originality of the article is that it expands knowledge on this topic.

Tax credit for value added tax: current status of accounting and electronic administration

The article highlights the economic essence of the value added tax and characterizes the dates of the tax credit for various transactions. The norms of the current legal acts regarding the recognition of the tax credit for the value added tax have been analyzed. The accounting accounts intended for the systematization and accounting display of the investigated tax are characterized. The procedure for the accounting display of the tax credit for the value added tax upon receipt of goods and material values on the terms of subsequent payment has been disclosed. The procedure for displaying in the accounting system of VAT-paying enterprises acquisition of tangible assets on the terms of advance payment is given. The process of displaying on accounting accounts the write-off of tax credit for tax documents that were not received from counterparties before the deadline for registration is highlighted. The process of accounting for the tax credit for value-added tax when performing other operations (settlements with accountable persons for the funds issued in the sub-report; import of tangible assets; services received from a non-resident in the customs territory of Ukraine; receiving an object under financial leasing) has been disclosed. It is proposed to improve the analytical accounting of the tax credit for value added tax. The procedure of electronic administration of value added tax and the procedure of registration of incoming tax documents in the ЕРПН are highlighted. Goal. Elucidation of the accounting display of the tax credit for the value added tax and the development of proposals for the introduction of analytical accounts for the detailed accounting of the investigated tax. Method (methodology). General scientific methods (analysis, synthesis, induction and deduction), empirical theoretical (formalization, hypothetical) and empirical methodological methods of research (calculation-analytical, implementation of results in practical activities, reporting display of economic activity). The results. For the purpose of reliable accounting display of information regarding the tax credit for the value added tax, it is proposed to display the operations, conditional formation of the investigated tax in the section of the following analytical accounts: 6441 "Tax credit confirmed"; 6442 "Tax credit not confirmed"; 6443 "Tax credit for prepayment"; 6444 "Tax credit deferred"; 6445 "Adjustable tax credit". This approach will allow for more accurate control of tax settlements with counterparties and to compare unconfirmed (expected) and confirmed VAT, and thus effectively manage obligations to the budget.

Tax credit for tax on added value: current state of accounting and electronic administration

The article highlights the economic essence of the value added tax and characterizes the dates of the tax credit for various transactions. The norms of the current legal acts regarding the recognition of the tax credit for the value added tax have been analyzed. The accounting accounts intended for the systematization and accounting display of the investigated tax are characterized. The procedure for the accounting display of the tax credit for the value added tax upon receipt of goods and material values on the terms of subsequent payment has been disclosed. The procedure for displaying in the accounting system of VAT-paying enterprises acquisition of tangible assets on the terms of advance payment is given. The process of displaying on accounting accounts the write-off of tax credit for tax documents that were not received from counterparties before the deadline for registration is highlighted. The process of accounting for the tax credit for value-added tax when performing other operations (settlements with accountable persons for the funds issued in the sub-report; import of tangible assets; services received from a non-resident in the customs territory of Ukraine; receiving an object under financial leasing) has been disclosed. It is proposed to improve the analytical accounting of the tax credit for value added tax. The procedure of electronic administration of value added tax and the procedure of registration of incoming tax documents in the ЕРПН are highlighted. Goal. Elucidation of the accounting display of the tax credit for the value added tax and the development of proposals for the introduction of analytical accounts for the detailed accounting of the investigated tax. Method (methodology). General scientific methods (analysis, synthesis, induction and deduction), empirical theoretical (formalization, hypothetical) and empirical methodological methods of research (calculation-analytical, implementation of results in practical activities, reporting display of economic activity). The results. For the purpose of reliable accounting display of information regarding the tax credit for the value added tax, it is proposed to display the operations, conditional formation of the investigated tax in the section of the following analytical accounts: 6441 "Tax credit confirmed"; 6442 "Tax credit not confirmed"; 6443 "Tax credit for prepayment"; 6444 "Tax credit deferred"; 6445 "Adjustable tax credit". This approach will allow for more accurate control of tax settlements with counterparties and to compare unconfirmed (expected) and confirmed VAT, and thus effectively manage obligations to the budget.

Digitization of Taxation System: Content Analysis of Strategic and Experts Perspective

The recent wave of modernization and digitization of Federal Board of Revenue and tax evasion culture is in conflict. At one hand, tax payers avoid being fair in tax settlements, and on the other hand, FBR is striving to develop more transparent tax system in Pakistan. In this research, we have explored the strategic and experts’ opinion for later i.e. with respect to digitization of taxation system in Pakistan. For which, panel discussions of industry experts, senior economist, and strategic persons have been utilized. This study may assist tax bodies to understand the causes of avoiding income tax e-filing, which enable them to overcome those causes of tax evasion and will help to formulate new implementable policies in order to minimize the size of undocumented economy. As Tax collection authorities are trying their maximum to increase the revenue collection; hence, the need of documentation of economy is inevitable.

The impact of legislation on the development of accounting digitisation in Poland

Purpose: This article aims to verify the development of the computerisation of busi-ness systems in Polish enterprises and to determine whether regulatory changes are a stimulant. The methodology/approach: The article uses the analysis method applied to secondary data collected and elaborated on by Statistics Poland (Pol. GUS) as part of their original research. Findings: The analysis demonstrates that more and more Polish enterprises use ERP (Enterprise resource planning) systems in their business activities. The percentage of entities using IT systems for enterprise management is constantly growing among smaller and larger enterprises. Research limitations/implications: The article is an introduction to in-depth re-search on accounting digitisation and the digitalisation of accounting processes in business entities, e.g. ERP, RPA (Robotic process automation), including tax settlements. Practical implications: The development of the Polish tax law regulation aims to develop digital communication between the taxpayer and the tax authority. This condition forces all types of business entities to gradually computerise and even robotise accounting processes and tax settlements. Originality/value: The article deals with a relevant topic, which is the process of computerisation and digitisation of business. Accounting and related tax settlements are essential elements in this process. The article describes the development in the automation and robotisation of enterprise accounting processes and tax settlements.

Nullity of tax settlements and the principle of legality in Peru years 2018-2019

Objetivo: Determinar cuáles son los factores que vulneran el derecho de defensa de los contribuyentes y el principio de legalidad. Método: La investigación tiene como objetivo explorar y utilizar un enfoque cualitativo, incluido un análisis descriptivo de la información disponible públicamente de los organismos: Administración Tributaria, Tribunal fiscal, Poder Judicial y Tribunal Constitucional. La estrategia de investigación cualitativa es un estudio de casos porque analiza las decisiones emitidas por estos organismos, ya que no existe una base de datos sobre la nulidad de las liquidaciones tributarias efectuadas por los contribuyentes; primero, a una instancia administrativa y segundo, a una instancia judicial. Asimismo, también busca medir las variables del estudio a través de un enfoque cuantitativo mediante la aplicación de encuestas y la determinación de la Chi Cuadrada. Resultados: La correcta cuantificación de la deuda tributaria debe cumplir con requisitos de procedimiento, competencia, y de forma establecidos en el ordenamiento jurídico. La complejidad del régimen jurídico de las liquidaciones tributarias genera denuncias que arriban en una nulidad o anulabilidad de estas. Conclusiones: Se concluye que el origen de la nulidad de pleno derecho en las liquidaciones tributarias ha sido desigual en la jurisprudencia. Que las liquidaciones tributarias que se enmarquen en una acción delictiva imputable al órgano que ha dictado la liquidación concurre la causa de nulidad. Son nulas las liquidaciones tributarias que hayan sido emitidas sin atender a los procedimientos o reglas esenciales legalmente instaurados para la formación de la voluntad de los órganos deliberantes. Las liquidaciones tributarias efectuadas contrarias a los pronunciamientos o sentencias con el objetivo de eludir son nulas de pleno derecho. Son nulas las liquidaciones al amparo de normas inválidas que no forman parte del ordenamiento jurídico, por su inconstitucionalidad e ilegalidad. La anulabilidad es declarada por la Administración Tributaria. El principio de legalidad es uno de los más valiosos de nuestro sistema jurídico e influye en la Administración Tributaria a aplicar sin establecer el alcance de la norma bajo el criterio que manda la ley.

Tax and Legal Issues Related to the Implementation of Research and Development Projects in the Area of "Security and Defense"

Purpose: The aim of the article is to discuss tax issues related to the settlement of subsidies for the implementation of projects in the area of"Security and Defense". The grant beneficiaries face numerous problems with the interpretation of the provisions of the VAT Act, which may result in serious financial consequences in the event of incorrect application of the VAT Act. This publication analyses and indicates solutions to these problems, which are most often raised by consortia, both in applications for tax interpretations and in complaints to administrative courts of both instances. Introduction: Among the important forms of activity for the security and defence of the state, a special role is played by scientific and research and development projects, which not only increase the potential of scientific and industrial entities, but also create Polish know-how in the field of critical technologies in the area of "Security and defence". The implementation of projects financed from the state budget places on the beneficiaries the obligation of a "regime" method of settling public funds, both by applying the provisions on public procurement, constructing civil contracts, taking into account the fact that funds from subsidies are available, as well as performing special diligence in tax settlements with the tax authorities. Methodology: The theoretical research methods were used in the work, including the analysis of literature, judgments of common courts and the Pro - vincial and Supreme Administrative Court, as well as tax interpretations issued by the Director of the National Revenue Administration. The publication also provides an interpretation of national regulations as well as directives and case law of the Court of Justice of the European Union. Conclusions: Tax law is the branch of law that arouses the greatest emotions and controversy. It affects all of us, and in the event of incorrect application of the rules – it has serious financial consequences. Members of consortia implementing projects financed by the The National Centre for Research and Development (NCBR) also remain taxpayers, to whom the author of the article proposed the interpretation of the provisions of the VAT Act and discussed national and EU jurisprudence in order to facilitate the correct implementation of tax obligations by the consortia. Keywords: VAT taxation of subsidies, eligibility of expenses, right to deduct input tax, transfer of proprietary copyrights to the State Treasury, commer - cialization of results of scientific research and development works Type of article: review article

The Effect of Unchallenged Tax Positions on Corporate Tax Aggressiveness: Evidence from Statute of Limitations Lapses

Tax authority resource constraints result in aggressive tax positions often going unchallenged. This study uses statute of limitations lapses to examine the effect of unchallenged tax positions on corporate tax aggressiveness. We first document that unchallenged tax positions are more likely when a firm claims less aggressive tax positions, when the tax authority has fewer resources, and when a firm has a more extensive geographic footprint. In our main analyses, we find that firms become less tax aggressive in years subsequent to positions going unchallenged, consistent with firms anticipating heightened tax authority scrutiny after disclosing unchallenged tax positions in their financial statements. In supplemental analyses, we find Internal Revenue Service (IRS) downloads of firms’ financial statements increase after firms disclose unchallenged tax positions, but tax settlements do not increase. Our findings shed light on a previously unexplored facet of taxpayer-tax authority interactions and are important in light of the increased budget constraints faced by tax authorities worldwide.

ЕКОНОМІЧНА СУДОВА ЕКСПЕРТИЗА ЯК ДОКАЗ У РОЗСЛІДУВАННІ ПОДАТКОВИХ ЗЛОЧИНІВ

The increase in the number of violations of tax legislation on the payment and settlements of taxes and fees in Ukraine, as well as the complication of the forms and means of committing such violations, necessitate a detailed study and improvement of the theoretical and methodological foundations of forensic audit. In addition, the lack of a forensic audit of settlements related to certain types of taxes and fees, among the certified and recommended for use in the Register of forensic audit methods, determines the relevance and timeliness of the research topic. The purpose of this article is to substantiate theoretical and methodological provisions and develop practical recommendations for the forensic audit of settlements related to the payment of taxes and fees. The article uses the following research methods: induction and deduction, analysis and synthesis, abstract-logical, cause-and-effect relationship. The results of the study are: study of the dynamics of tax crimes in Ukraine in recent years; substantiation of the main types of tax violations that are objects of forensic audit; determination of the features of the methodology of forensic audit of settlements related to the payment of taxes and fees; generalization of the evidence base, which is the basis for a forensic audit of settlements related to the payment of taxes and fees; development of a general algorithm for forensic accounting expertise of settlements related to the payment of taxes and fees, in the context of the main stages: preparatory, organizational, research, final. Attention should be paid to the generalization of the main procedures used at the research stage, in the context of the main types of tax settlements during conducting an expert study of adjusted tax revenues, tax expenses; calculation and payment of value added tax, personal income tax, and environmental tax. The results of the study should contribute to the further development and improvements of the theoretical and methodological foundations of forensic audit of settlements related to the payment of taxes and fees, a full and comprehensive study of the actual circumstances of the case, and also aim to create opportunities to increase the certainty of the conclusions of forensic auditors.

Wpływ mechanizmu odwrotnego obciążenia na działalność małych i średnich przedsiębiorstw z branży budowlanej

Powodem wprowadzenia mechanizmu odwrotnego obciążenia w branży budowlanej były zaobserwowane nieprawidłowości w zakresie rozliczeń podatku VAT. Celem rozważań prowadzonych w artykule jest analiza istoty mechanizmu odwrotnego obciążenia VAT jako instrumentu do zwalczania oszustw podatkowych i jego ocena z trzech punktów widzenia: konstrukcji przepisów podatkowych oraz ryzyka podatkowego w związku z ich stosowaniem przez przedsiębiorstwo, branży, w której zastosowano mechanizm reverse charge oraz sektora małych i średnich przedsiębiorstw, które świadczyły usługi budowlane objęte mechanizmem odwrotnego obciążenia. W artykule zastosowano metodę ustrukturyzowanych wywiadów z właścicielami małych i średnich przedsiębiorstw z branży budowlanej. Odpowiedzi przedsiębiorców pozwoliły autorce przedstawić w ogólnym zarysie problemy w rozliczaniu usług budowlanych w Polsce po wprowadzeniu mechanizmu odwrotnego obciążenia. W artykule posłużono się krytyczną analizą aktów prawnych regulujących funkcjonowanie mechanizmu reverse charge. Zmiana legislacyjna dotycząca poboru podatku od transakcji związanych z usługami budowlanymi była nieprecyzyjna m.in. przez brak definicji podwykonawcy. Ustawodawca, widząc skalę problemów i nieefektywność zmiany legislacyjnej, po niespełna dwóch latach zastąpił odwrotne obciążenie obligatoryjnym systemem podzielnej płatności.

Estimating the Likelihood of Future Tax Settlements Using Firm Fundamentals and Text Disclosures

This study develops an ex-ante measure of the likelihood of future corporate income tax settlements using qualitative (i.e., language) and quantitative information (i.e., firm fundamentals) from the Form 10-K. We find that both qualitative and quantitative information are incrementally useful in predicting future tax settlements. We then use our new measure to examine the association between predicted future tax settlements and cash holdings. In contrast with prior research documenting a positive association between reserves for uncertain tax positions and cash holdings (Hanlon, Maydew and Saavedra 2017), we find that firms with a higher likelihood of future tax settlements hold less cash than firms with a lower likelihood of future tax settlements. In addition to providing an ex-ante measure of future cash outflows paid to tax authorities that can be used by future researchers, our findings suggest a more nuanced relation between tax uncertainty and cash holdings.

Proces cyfryzacji podatku VAT w Polsce

Przedmiot badań: W celu zapobiegania wyłudzaniu podatku VAT podejmowane są szeregi dzia­łań zmierzających do zbudowania skutecznego systemu kontroli i zarządzania w zakresie podatku od towarów i usług. W celu uszczelnienia systemu podatkowego w Polsce Ministerstwo Finan­sów przenosi rozliczenia podatków do świata wirtualnego. Nastąpił proces zmiany sposobu ko­munikacji z podatnikiem, przechodząc z osobistego, tradycyjnego kontaktu do przeprowadzania czynności związanych z podatkami przy użyciu środków komunikacji elektronicznej. W polskiej literaturze podmiotu nie rozważano wcześniej istoty cyfryzacji podatków i wpływu tego procesu na budżet państwa i podatników.1
 Cel badawczy: Celem rozważań prowadzonych w artykule jest analiza procesu cyfryzacji po­datków w Polsce. Autorzy przedstawili jego istotę i dokonali oceny z trzech punktów widzenia: konstrukcji przepisów podatkowych, wpływu na budżet państwa oraz polskich podatników. Dys­kurs prowadzony jest w powiązaniu z prezentacją roli procesu cyfryzacji w walce z oszustwami podatkowymi oraz wpływem tego procesu na funkcjonowanie przedsiębiorstw.
 Metoda badawcza: Badania oparto na kwerendzie literatury z zakresu opodatkowania podatkiem VAT. W opracowaniu zaprezentowano wyniki analizy treści aktów prawnych. Dokonano ponadto prezentacji i interpretacji danych agregowanych na temat wielkości luki podatkowej w Polsce w latach 2010–2017. Zmniejszenie luki podatkowej powiązano z procesem cyfryzacji podatków.
 Wyniki: Digitalizacja podatków przysparza nowych obowiązków, ale także usprawnia walkę z oszustwami podatkowymi oraz ogranicza lukę podatkową. Rozwiązania mające na celu ogra­niczenie luki podatkowej budzą pewne kontrowersje wśród przedsiębiorców i w analizach nad efektywnością rozwiązań powinno się uwzględnić przede wszystkim ich wpływ na działalność, kondycję oraz płynność finansową przedsiębiorstw. Przedsiębiorstwa stoją przed wyzwaniem cią­głego dopasowywania się do zmian, które są wprowadzane w celu ograniczenia oszustw podat­kowych oraz łatwiejszego kontrolowania dokonywanych transakcji przez polskich podatników.

Determining and Changing Tax Residence – the Effects on Individuals

The subject of this article is the analysis of reasons and results of determining as well as changing tax residence in the light of Polish personal income tax. This topic underlies a broad concept of migration, especially that of profit-driven character. The author presents this research issue on the basis of the current legislation, doctrine as well as practice of applying the law by the judiciary and the tax autho-rities. The analysis of the valid regulations of tax law leads to the conclusion that the fiscal situation of migrants is so diversified as well as complicated from the legal point of view that it raises justified practical doubts. It is assumed that tax residence is dynamic and thus may change as a result of both intended and unin-tended taxpayers’ actions which may have specific tax law effects. They are reflected not only in tax preferences but also in obligations concerning tax settlements. Apart from ordinary tax consequences of determining or changing tax residence, the author relates also to particular legal solutions such as: exit tax, taxation of foreign controlled companies or appliance of the provisions of Multilateral Convention (MLI). The described issues are significant for both theory and practice of tax law application.

Obciążenia fiskalne pracy mikroprzedsiębiorstw w Polsce

Celem artykułu jest przedstawienie i analiza obciążeń fiskalnych pracy mikroprzedsiębiorstw w Polsce z wyodrębnieniem obciążeń osoby fizycznej prowadzącej działalność gospodarczą w ramach tzw. samozatrudnienia oraz obciążeń odprowadzanych przez przedsiębiorcę za pracowników. W artykule zostały zaprezentowane ponadto uwarunkowania fiskalne prowadzenia działalności gospodarczej na podstawie danych pochodzących z raportu Doing Business 2018 opracowanego przez Bank Światowy (World Bank Group). Zasadniczą kwestię w zakresie obciążeń fiskalnych pracy odgrywają obciążenia parapodatkowe pracy, wyrażające się w obowiązkowych składkach na ubezpieczenia społeczne i ubezpieczenie zdrowotne, co stanowi dla mikroprzedsiębiorstw jedną z większych barier w prowadzeniu i rozwoju działalności gospodarczej. W ostatnich latach Polska uzyskała znaczącą poprawę w kryterium dotyczącym czasu poświęconego rozliczeniom podatkowym.

ENVIRONMENTAL TAXES: PROCEDURE FOR TAXATION AND DISCLOSURE IN ACCOUNTING SYSTEM

The tax system of any country is formed primarily in order to fulfil the fiscal function, which is aimed at filling the state budget. However, the problem of environmental pollution has risen in the world; therefore, this issue may be solved at the expense of different levers of the state influence at the level of the national, regional and local government. This process can be assisted through the intensification of the control function of such kind of tax payments as environmental tax. To control the activities of enterprises in the part of economic operations that cause environmental pollution through the construction of high quality information base, it is necessary to study the approaches established by the system of environmental taxation and reflection of such operations in the accounting. Recording of transactions on the accounting of the environmental tax settlements is carried out using the Settlement of tax commitments on the environmental tax, which is charged for emissions into the air of pollutants by stationary sources of pollution and Settlement of tax commitments on the environmental tax, which is charged for the placement of waste in the places or objects designated for these purposes. Based on the information given in the above-mentioned documents, the Tax Declaration of Environmental Tax is drawn up. These documents are constituents of tax reporting on the environmental tax, which show generalized information over the reporting period, i.e. a quarter. Currently, businesses want to have information that has been formed in time during a rather short time period in order to make operational and tactical decisions. We consider that it is necessary to meet the requirements of users through the formation and submitting accounting information in the form of auxiliary information on the charging of the environmental tax taking into account the specific approaches to taxation for one or another type of the environmental pollution. Such accounting information can be grouped at the request of users for certain time period, e.g. a week, a month, etc. Real environmental commitments can be reflected in the accounting system of the business entity in the context of analytical accounts, which are opened in the account 64 “Settlements of taxes and payments” and sub-account 641.5 “Settlements of the environmental tax”. The loan of this subaccount reflects the charge of the environmental tax, and its transfer to the budget – for a loan. We propose to carry out analytical accounting of settlements for environmental taxes by the types of payments (basic payment, fines, penalties) with the allocation of analytical accounts, i.e. the tax on actual emissions into the atmospheric air of pollutants by stationary sources of pollution; tax on actual volumes of emissions; tax on actual waste disposal. Accounting performed in the context of the proposed analytics will enable to form information on environmental commitments in terms of tax payments in order to provide effective management of the environmental activities of the enterprise. According to the Methodical recommendations on management reporting, one of the areas in which this form of report is being developed is the disclosure of environmental aspects. Proposals for the improvement of the procedure of documenting operations for charging commitments to the budget, as a result of meeting the requirements of environmental taxation in the form of auxiliary information and reflection in the accounting system of accounts, will improve organization of the accounting process during its practical application. This will enable not only to resolve the accounting issue on the formation of qualitative, reliable and unbiased information by its characteristics of information for reporting, but also to strengthen control over compliance with the environmental legislation and preservation of the environment. The accounting information formed by this method way will serve as an information base, in particular, to make the management report.

Double Trouble: An Analysis of IRS Attention and Financial Reporting

We examine whether the IRS uses public information to obtain qualitative signals regarding the quality of firms’ financial information or management integrity. Using the procurement of public information as a proxy for IRS attention, we test whether public signals of poor information quality (restatements) lead to an increase in IRS attention. To begin, we document that the IRS is both more likely and quicker to acquire public filings announcing a restatement than any other filing of the firm. Furthermore, we examine instances in which the IRS is more likely to learn of a restatement and find an increase in attention around both press releases and media coverage of the restatement. Next, we examine the implications of increased IRS attention. Employing path analysis, we find that IRS attention is associated with both higher levels of future tax settlements, and a greater likelihood of the mention of a tax audit. Overall, our results are consistent with the IRS responding to signals of poor information quality or management integrity as if financial misreporting and tax reporting are related.

Wykorzystanie technologii blockchain do eliminacji wybranych problemów systemu podatkowego

Technologia blockchain, dzięki cechom wyróżniającym ją na tle tradycyjnych rozwiązań bazodanowych, ma potencjał, aby zrewolucjonizować sposób rozliczeń podatkowych: sposób poboru i zwrotu podatku, sposób rozliczeń i weryfikacji transakcji, compliance czy też mechanizmy fakturowania. Dzięki temu może pomóc skutecznie rozwiązać podstawowy problem systemu podatkowego - lukę podatkową. Osiągnięcie korzyści będzie zależało jednak od konkretnych mechanizmów i sposobu implementacji oraz obszaru wdrożeń. Omawiamy i analizujemy 6 koncepcji rozwiązań w 5 obszarach: digitalizacji faktur; utworzenia krajowej kryptowaluty do rozliczeń podatkowych; rozliczenia dywidend zagranicznych udziałowców; compliance w zakresie cen transferowych oraz weryfikacji czynnych podatników VAT. W naszej ocenie najwięcej korzyści przy najmniejszej liczbie wad ma potencjał dostarczyć koncepcja wprowadzająca cyfrowy obieg faktur (DICE) w oparciu o technologię blockchain. Koncepcje wspierające płatności zobowiązań podatkowych posiadają obecnie istotne wady ograniczające efektywność. Pozostałe rozwiązania nie są wystarczająco dobrze dopracowane, aby stanowić realną alternatywę dla istniejącego systemu podatkowego lub możliwych rozwiązań nie opartych na technologii blockchain. Słowa kluczowe: blockchain, sektor usług publicznych, opodatkowanie, system podatkowy, podwójne wydatkowanie, umowy o unikaniu podwójnego opodatkowania, nauki o projektowaniu, podatek od towarów i usług, ceny transferowe.

Managers’ Use of Tax Settlements in Future Uncertain Tax Benefit Accruals

We examine the financial statement disclosures that accompany settlements of uncertain tax benefits (UTB) to explore how managers reflect this information into their underlying probability assessments and thus future estimates of UTB reserves. We use textual analysis to develop a measure of the similarity between tax footnotes and a tax settlement-specific list of terms capturing unfavorable and favorable outcomes. After demonstrating that this proxy is associated with a subset of manually verified settlements, we examine whether these disclosures predict future UTBs. We find that managers revise upwards future UTBs following unfavorable tax settlements, but do not revise future UTBs following favorable tax settlements. These findings are consistent with extant theory and literature that suggests subsequent judgments respond more to unfavorable information and that UTB balances tend to be over-stated. Our research fills a gap in extant literature by providing evidence on how managers incorporate new information into their judgments. Our research also provides a method to classify routine but ambiguous tabulated financial statement disclosures, and demonstrates specifically the usefulness of certain qualitative UTB information.