Determinants of Tax Preparer Usage: Evidence From Panel Data

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 ROLE OF INCOME TAX SYSTEM STRUCTURE IN TAX NON-COMPLIANCE BEHAVIOUR AMONG SMEs IN YEMEN

“…In the literature review carried out in this study, most of the earlier empirical studies were found to support the results of the present study, such as the studies by Clotfelter (1983), Feinstein (1991, Christian et al (1993), Joulfaian and Rider (1998), Ali et al (2001), Lin and Yang (2001), McGee and Ho (2006), Lingle (2006), andRossi (2006). Hai and See (2011) found that the high tax rate led to high tax non-compliance, and Park and Hyun (2003) found that increasing tax rates encouraged non-compliance behaviour.…”

Do taxpayers consider quality labels as a form of recommendation for good tax-preparation services? Evidence from Germany

“…Further, they state that taxpayers with children are more curious about saving time and money during their tax-preparing services, compared to those taxpayers without children. Hence, Stephenson et al [ 26 ] support the propositions of time-cost-savings being relevant for the intention to use tax-preparation services stated by Christian et al [ 22 ]. According to Stephenson et al [ 26 ], future studies should also consider the size of the tax-preparation service, as small and regional tax-preparation services tend to be more taxpayer-focused than larger ones in non-regional areas are.…”

“…Tax-preparation services utilize professional service providers, and recommendations are mandatory for their success [ 4 , 5 , 7 , 9 , 20 ], as are quality labels [ 3 , 11 ]. According to principal–agent theory, principals (i.e., taxpayers in the context of this study) hire agents (i.e., tax-preparation services) [ 10 , 13 , 21 ] because they want to complete tasks that they cannot, for many reasons (e.g., limited time, insufficient knowledge, high costs), complete by themselves [ 6 , 10 , [22] , [23] , [24] , [25] , [26] ]. Therefore, agents promise that the tasks in question will be completed adequately [ 13 ].…”

“…Hence, Lee proposed that quality labels are important in the assessment of auditing professions and should be investigated by future research [ 11 ]. In their study investigating determinants of tax-perparer usage examining panel data, Christian et al [ 22 ] provide factors that positively influence individuals’ intention to use tax preparer. They determined three key aspects: first, time-cost-savings for taxpayers are positively influencing the intention to use, with intention increasing for those taxpayers who want to save time.…”

“…Third, the effect of income and marginal tax rate on the intention to use tax-preparation services is unclear for models that aim to explain complexity and when the source of the income of the respective individual is unclear. Nonetheless, Christian et al [ 22 ] state that future research should address certain factors for tax-preparation-service usage continuously, as new legal regulations for taxes could lead to different intentions to use tax preparation services. To report on certain demands for tax preparations, Dubin et al [ 6 ] used nested logit techniques.…”