Code Comprehension and Aggressiveness Among Corporate Tax Executives: The Impact of Certification and Licensure
Research has shown that corporate tax executive certification and licensure (credentials) are important indicators of tax resource allocation within a corporation. This study investigates the overall impact of corporate tax executive credentials on job performance. We measure tax executive job performance in the following ways: understanding of tax guidance, perception of time constraints imposed by tax code changes, and reported aggressiveness of the corporate tax return. Corporate tax noncompliance can result from aggressive positions taken on a tax return or from the misunderstanding of relevant tax guidance, including the Internal Revenue Code, tax regulations, and tax law. Therefore, it is important to identify the differentiating factors related to corporate tax aggressiveness and comprehension of tax guidance by corporate tax professionals. Two hundred twenty-three experienced corporate tax executives responded to a detailed questionnaire regarding corporate tax compliance. Results of the study indicate that tax executive credentials significantly impact understanding of the tax code, perceptions of tax laws and regulations, and aggressive filing. Specifically, tax executives without credentials are more likely to report difficulty with tax code readability and more likely to report aggressive filing behavior.