Political affiliation, and family composition on reasonable compensation decisions: An empirical assist

W. Brian Dowis, Ted D. Englebrecht

Research output: Contribution to book or proceedingChapterpeer-review

Abstract

Reasonable compensation is a highly scrutinized area of taxation by the Internal Revenue Service because of the tax impact on both corporations and employees. The guidance provided via statutory and administrative authority does not fully address this issue. Specifically, there is a lack of clarity and consistency in this arena of tax. Our study examines reasonable compensation in closely held corporations and the impact of gender, political affiliation, and family makeup on decisions made in the US Tax Court. The time frame of judicial decisions covers 1983 through 2014. We use regression models and chi-square tests to analyze the effect of gender, political affiliation, and family composition on US Tax Court decisions in reasonable compensation cases. We find that the judge’s gender and tenure/experience are significant. Our results also suggest a relationship between the duration of the case and the judge’s decision. Our significant variables include judge’s gender, number of tax years covered by the case, taxpayer’s gender, and tenure/experience of the judge.

Original languageEnglish
Title of host publicationAdvances in Taxation
PublisherEmerald Group Publishing Ltd.
Pages73-90
Number of pages18
DOIs
StatePublished - 2018

Publication series

NameAdvances in Taxation
Volume25
ISSN (Print)1058-7497

Keywords

  • Closely held corporations
  • Judge’s gender
  • Political affiliation
  • Reasonable compensation
  • Taxpayer’s gender
  • US Tax Court

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