Corporate tax avoidance and the properties of corporate earnings.

INTRODUCTION

Differences in the accounting lordships for financial (book) and tax reporting objects can lead to differences in the amount of income reported to shareholders and tax authorities. While book-tax reporting differences have existed since the beginning of the U tax collection of laws they have recently been used to address the two tax and non-tax issues. The U Department of the Treasury White Paper (1999) identified large, and increasing, book-tax income differences as evidence supporting an increase in tax shelter activities. At the same time, accounting researchers have used estimates of book-tax differences to assess the properties of corporate earnings.