No abstract

For a considerable number of years, business income tax returns attested by a certified public accountant (CPA) have enjoyed special tax incentives. There has, however, been no documentary evidence to justify the existing tax incentive policy. This study, which uses a Tobit model to undertake an analysis of business income tax return data, empirically demonstrates that CPA attested tax returns are more compliant with the tax law than non-attested tax returns. This finding suggests that tax authorities should continue to promote the use of CPA attested tax returns. As well, this finding recommends the auditing of a greater proportion of non-attested returns in order to reduce the incidence of tax evasion.

No abstract

This study provides new evidence on the factors associated with using tax return preparers from a balanced panel of microlevel tax return data for 1982-4. The results of fixed-effects logit models that control for unobservable differences levels of paid-prepared and self-prepared

The extant U.S. domestic literature provides evidence that if administered in an unbiased manner, merit pay can be a significant motivator. However, the same literature shows that judgment biases can lead to over-rewarding of “favored failures,” individuals who receive favorable treatment despite their poor performance. The cross-cultural literature provides evidence that collectivist societies treat some portion of “merit” pay as salary rewarding both successful and unsuccessful performers with some merit pay. There has been no test in this literature of the treatment of “favored failures” but theoretical arguments and evidence from the cross-cultural escalation of commitment literature suggests that collectivist societies may be less subject to the “favored failures” control problem. A “face” effect may offset the effect of collectivism in Chinese societies. Using a behavioral experiment and subjects from countries that are at the extremes of Hofstede's (2000) individualism-collectivism spectrum (Taiwan, United States) this paper finds that evaluators (subjects) from the more individualist U.S., overall provide less merit less often to poor performers than the collectivist Taiwanese. The U.S. evaluators also display significantly greater judgment biases than the Taiwanese for poor performers to whom they have a prior commitment. Thus, both societies have biases but from different angles and, as such, present employers with different control issues.