Is Tax Planning Best Done In Private?
54 Pages Posted: 16 Jul 2019 Last revised: 29 Aug 2019
Date Written: August 27, 2019
We investigate tax planning by privately-held corporations. Privately-held firms are commonly believed to face lower costs of tax planning relative to publicly-held firms, and thus are believed to engage in greater tax planning. We use data from the Internal Revenue Service, allowing us to examine many tax planning measures for public and private firms. Contrary to conventional wisdom, we find no evidence that private corporations tax plan more relative to similar-sized public corporations in the same industry. Moreover, some evidence suggests that private corporations engage in less tax planning.
Keywords: Tax planning, Private corporations, C-corporations
JEL Classification: H25, H26, K34, G38, M41
Suggested Citation: Suggested Citation