Tomorrow's accounting professionals need to understand both accounting and data analytics. To meet these needs, we developed a case that combines an important area of tax accounting, Effective Tax Rates (ETRs), with multiple data analysis skills. The case can be completed in Excel, or with Tableau and/or Alteryx, using Compustat or public data. The case's learning objectives for students are to: (1) expand knowledge of data analytics and ETRs; (2) use critical-thinking skills to identify economic, industry, and firm-level factors that might affect ETRs; (3) develop skills specific to data analytics and data visualization in accounting; and (4) develop effective oral and written communication skills. We evaluate the case's efficacy using data from pre- and post-learning assessment surveys and open-ended responses, which indicate that the comprehensive case meets these learning objectives.

IRC §162(m) originally denied corporations tax deductions for nonperformance compensation in excess of $1 million per executive when paid to the CEO and the next four highest paid named executive officers. Following the 2006 SEC proxy statement revision, which the IRS deemed incompatible with §162(m), the IRS excluded CFOs from §162(m). This exclusion exogenously altered the CFO compensation environment, creating a natural experiment we exploit to examine how §162(m) influences executive compensation. Using a difference-in-differences design, our analysis allows us to draw causal influences generally lacking in prior §162(m) studies. We find that after the IRS exclusion of CFOs, firms increased the nonperformance compensation of CFOs who otherwise would have been affected by §162(m). Consistent with the shift to less risky compensation reducing the risk premium demanded by CFOs, we find some evidence of a reduction in their compensation growth. Our analysis provides evidence that tax policy influences compensation design.

In 2015, the U.S. Supreme Court recognized the fundamental right to marry in Obergefell v. Hodges. At the same time, the tax code commonly taxes married couples at a higher effective tax rate than their unmarried counterparts. We examine the constitutionality of the penalty on marriage, critically reviewing the justification for the penalty accepted in Johnson v. U.S. in 1976. Our evaluation of the tax system suggests that the marriage tax penalty violates Due Process and may violate Equal Protection and the First Amendment for some taxpayers.

While agency theory predicts that the unification of ownership and control of private family firms reduces agency concerns, some prior studies suggest that the complex family relationships of private, family firms increases agency conflicts.  To investigate these conflicting predictions, this study empirically examines with regression analysis how executive total compensation levels relate to dividends at public versus private firms to compare the conflict resolution strategies of public versus private firms.  For public firms, this study finds a positive compensation-dividend relation, indicating that public firms increase total compensation levels to reward executives for supporting firms’ dividend policies and realign the interests of owners and managers from the conflict created by dividends.  Drawing from special access to Forms 1120, this study examines a large sample of privately held U.S. firms.  For private firms, this study finds a negative compensation-dividend relation, indicating that private, family firms do not use compensation to realign the interests of owners and managers and overcome the conflict created by dividends.  This new evidence suggests that the ownership structure of private, family firms systematically mitigates agency concerns to some degree.  On a practical level, this study indicates that firms can provide compensation arrangements that support firms’ dividend policies, and that regulatory agencies should continue to focus on public firms where the great dispersion of ownership systematically increases agency concerns.

Students use data analytics to evaluate fictitious online sales data and explore sales tax nexus standards following South Dakota v. Wayfair, Inc. ( Wayfair).  This case provides instructors flexibility. Students can use Tableau to create visualizations that identify states with sales satisfying nexus standards, applying the Wayfair or multistate standards.  Students can use Robotics Process Automation to evaluate whether the company established nexus in a particular state. Instructors can include no tax research or select from several pertinent tax research questions. This case can be used in undergraduate or graduate tax, audit, or AIS courses, from compliance or tax risk perspectives. The learning objectives are to develop students’: (1) knowledge of data analytics; (2) knowledge of economic nexus and assess the tax law changes impact on business decisions; (3) research skills; (4) skills specific to data analytics and data visualization in accounting; and (5) effective oral and written communication skills.