Do Irs Audits Deter Tax Avoidance

In: Business and Management

Submitted By karleecr
Words 867
Pages 4
Do IRS Audits Deter Tax Avoidance?

RES 351
July 14, 2014 r

Research is done for many reasons. It can be used to solve problems or issues that a business is having. Research can be used by business to determine if making certain changes will yield the results the company desires. Many businesses use research when developing new products to determine what consumers think of the product. They are trying to determine if consumers will purchase the product if they continue with development. This particular essay is focusing on the IRS auditing of business and how they may or may not take aggressive approaches in order to avoid those audits. Three different universities compiled the research article used for this paper. It focuses on corporate tax avoidance and whether strict IRS monitoring deters corporate tax avoidance. When reviewing this article, it is apparent that they used the reporting study method for their research. This method uses previous data and data sources to reiterate the data for a better understanding. This article uses data from the TRAC (Transactional Records Clearinghouse), that the IRS provides data directly too. Next we will be discussing how the research is providing insight into the research question. There are many factors that the researchers took into consideration. Some factors include the perception of management; whether stricter IRS monitoring constrains some business' aggressive tax planning, and management's role in exploiting tax planning. Some of the data used was a survey that they conducted regarding managements perception of audits, rather than actual occurrence of audits. This survey showed that managers perceived that audits occurred more frequently than they actually did. Researchers also analyzed data from 1992-1980 that suggested that the occurrence of an audit has been declining through the…...

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