The Small Business Work Opportunity Act of 2007 enacted significant changes in tax return preparer penalties. This study uses an experiment to examine the effectiveness of the revised preparer penalty provisions at reducing tax preparer aggressiveness. Specifically, we examine the impact of two significant components of the changes to the preparer penalty provisions—penalty amount and reporting standard required to avoid penalty imposition—on tax preparers' recommendation and signing decisions involving an aggressive tax position. We find that the increase in penalty amount has no effect on tax preparers' recommendation decisions, but does affect their signing decisions. A higher reporting standard significantly reduces both tax preparers' willingness to recommend an aggressive position and to sign a tax return containing an aggressive position. Data Availability: Data used in this study are available from the first author upon request.

SYNOPSIS We predict taxpayers who use tax software developed by tax authorities will be more compliant than those who use commercial tax software. Experiment 1 indicates that taxpayers who are shown by prior literature to be aggressive (those in a tax-due position) report less aggressively when they utilize tax software developed by the taxing authorities, compared to a commercial software package. Using tax software developed by tax authorities minimizes the difference in aggressiveness between taxpayers in a tax-due position and those in a refund position, mitigating the effects found in prior research. Results from Experiment 2 suggest that the identity of the software developer is key; placement of a tax authority logo on commercial software does not create the same effect. Experiment 2 also provides evidence that taxpayers assume a greater detection risk when using authority-developed software, accounting for some change in behavior. The results of this paper have implications for researchers, taxpayers, and policy makers.

Accounting academia and professional organizations alike emphasize the need for the integration of technology and information systems into the accounting curriculum. This case integrates taxation concepts (individual retirement savings) and information systems and technology skills (advanced Excel). The case, which can be implemented at the undergraduate or graduate level, requires students to use advanced Excel technical functionality to calculate the tax implications of retirement investing scenarios using three specific types of tax-deferred retirement accounts - a traditional 401(k), a traditional IRA, and a Roth IRA. As many students who complete this case will work for public accounting firms which offer retirement plans, they will benefit academically, professionally, and personally from the knowledge and skills learned in this case.

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This study investigates the impact of the internal controls over financial reporting requirements (ICFR) on the decision making of corporate tax executives. I examine tax executives' decisions to disclose an internal control deficiency by amending a prior year return when the internal control deficiency will be classified as either a significant deficiency or a material weakness. I also examine if tax executives' decisions are impacted by whether amending results in a refund or additional tax due. I find tax executives are less likely to disclose (amend) when the internal control deficiency is classified as a material weakness. When facing a material weakness, 16.7 percent choose not to disclose. Tax executives are also less likely to disclose (amend) when amending results in additional tax due. These results indicate the ICFR requirements may have unintended consequences. If executives do not disclose internal control deficiencies, the reliability of financial reporting is limited.