Date of Award
Doctor of Philosophy
John M. Malloy
Charles D. Bailey
Frances H. Fabian
Craig J. Langstraat
This dissertation presents three papers that examine the impact of ethics on the field of taxation. Many observers assert that the field of taxation is without morals; that is, tax preparers and taxpayers attempt to exploit the system as much as possible to increase their profitability. In my dissertation I explore the ethical and unethical practices of corporations, individual taxpayers, and tax preparers. To accomplish my goals I have employed three different research methodologies: Archival, Experimental, and Legal. Paper 1 discusses ethics and taxation at the corporate level by testing the impact of Corporate Social Responsibility and Financial Sustainability on tax avoidance/aggressiveness. Paper 1 uses archival methodology to support its hypotheses, and I find that corporations that are both Financially Sustainable and involve themselves in Corporate Social Responsibility are less likely to engage in aggressive tax behavior. Paper 2 discusses ethics and taxation at the individual level by testing the impact of an ethical prompt and the IRS’s name on an individual’s acceptance of tax evasion. Paper 2 uses experimental methodology to support its hypotheses, and I find that an ethical prompt can reduce the acceptance of tax evasion. I also find that being exposed to the IRS’s name increases the acceptance of tax evasion. Finally, Paper 3 analyzes a significant issue in taxation—S corporation reasonable compensation. This paper uses Legal research methodology to reach its conclusions. First, I discuss the recent cases relating to S corporation compensation. Second, and more importantly, I find that many tax preparers are engaged in dubious ethical practices in the area of S corporation compensation. That is, tax preparers are filing returns that have no “reasonable basis” of success based on reasonable compensation precedent. This implies that these tax preparers are in violation of Circular 230 and can be penalized by the IRS. The acceptance of tax evasion (and aggressive tax avoidance) appears to be common at the corporate, individual taxpayer, and tax preparer levels. These papers propose solutions to prevent tax evasion from occurring, and these proposals are useful for standard setters and professional organizations attempting to reduce tax evasion.
Dissertation or thesis originally submitted to the local University of Memphis Electronic Theses & dissertation (ETD) Repository.
Plecnik, James M., "Three Essays on: Ethics and Responsibility in Taxation" (2015). Electronic Theses and Dissertations. 1201.