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Since tax audit rates are based on the percentage of corporate income tax returns examined
for a certain asset class,these classes are leading to determine the sample groups. This information is gathered from IRS Data Books, in contrary to prior studies who use Transactional Records Access Clearinghouse (TRAC) (Hanlon et al., 2011; Guedhami and Pittman, 2008; El Ghoul et al., 2010). IRS Data Book has more classes of probabilities for firms above the 250 million dollar total asset point than TRAC, which makes differentiating among IRS audit probability more valuable. For example, TRAC combines so called Coordinated Industry Case with non CIC firms in one category.....[Citing TRAC research].
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