Contemptuous Positions

Israel Klein

Research output: Working paperResearch

Abstract

The reliance on self-reporting techniques in the collection of income taxes requires taxpayers to self-assess their tax liability and self-report it to the tax authority (which might or might not audit the report). Acting as agents of the government for the purpose of assessing and collecting taxes, taxpayers can engage in contemptuous reporting which involves knowingly reporting tax positions that do not conform to the tax code. Nonetheless, such reporting is expected to result in a tax savings since in all likelihood the submitted return will not be audited. Although believed to be endorsed by all taxpayers, this article mainly focuses on the use of contemptuous tax positions by corporations. Findings in regard to publicly traded companies indicate a tremendous loss of tax revenues resulting from contemptuous tax reporting by corporations; nevertheless, popular tax parameters prevalent in regulatory discourse and legal research of corporate tax behavior do not convey information about these positions. Hence their reporting and the circumstances allowing it are left unaddressed by the legal system.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherCopenhagen Business School [wp]
Number of pages20
Publication statusPublished - 2020
Externally publishedYes
SeriesCBS LAW Research Paper
Number20-30

Keywords

  • Tax reporting
  • Contemptuous tax reporting
  • Corporations

Cite this

Klein, I. (2020). Contemptuous Positions. Copenhagen Business School [wp]. CBS LAW Research Paper, No. 20-30 https://ssrn.com/abstract=3688906