Personally Tax Aggressive Executives and Corporate Tax Sheltering

Posted: 15 Jan 2012 Last revised: 21 Sep 2013

See all articles by James Chyz

James Chyz

University of Tennessee, Knoxville - Department of Accounting and Business Law

Date Written: September 20, 2013

Abstract

This paper investigates whether executives who evidence a propensity for personal tax evasion (suspect executives) are associated with tax sheltering at the firm level. I adapt recent research to identify the presence of these executives and examine associations between suspect executive presence and firm-level measures of tax sheltering. The results indicate that the presence of suspect executives is positively associated with proxies for corporate tax sheltering. In addition, firm-years with suspect executive presence have significantly higher cash tax savings relative to firm-years without suspect executive presence. I also investigate the firm value implications of suspect executive presence and find that increases in tax sheltering are incrementally more valuable for firms that have suspect executives than similar increments made by firms that do not have suspect executives.

Keywords: tax aggressiveness, tax sheltering, executive personal traits

JEL Classification: K3, L5, H30, H3

Suggested Citation

Chyz, James, Personally Tax Aggressive Executives and Corporate Tax Sheltering (September 20, 2013). Journal of Accounting & Economics (JAE), Forthcoming. Available at SSRN: https://ssrn.com/abstract=1985558 or http://dx.doi.org/10.2139/ssrn.1985558

James Chyz (Contact Author)

University of Tennessee, Knoxville - Department of Accounting and Business Law ( email )

Knoxville, TN
United States
865-974-1701 (Phone)

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