Thursday, May 03, 2007


Yesterday afternoon, at about 2 pm, I finally got the chance to start my summer research & writing. No exams to grade, as I spent a good part of the semester grading weekly papers in my colloquium, but lots of underbrush that I had to clear before finally getting started.

My first project for the summer & fall (when I'll be on sabbatical but in residence here at NYU) concerns the issue of book-tax differences, permitting publicly traded companies to report low taxable income and high accounting income, in each case potentially through dubious manipulation. Many have proposed requiring book-tax conformity, a notion that has some real problems despite its appeal. Rather than just taking a particular stance, I am hoping to bring a bit more analytical depth to the issues that are raised.

Other topics on my agenda include penalties for taking ex post erroneous tax positions (I have an SSRN-posted paper on this, but hope to dig deeper), possibly something on the estate or inheritance tax/generation-skipping tax set of issues, and possibly something on generational equity, a topic on which I've heretofore focused on measurement issues while putting off consideration of the philosophical merits. That might even turn out to be a book, but then again it might not even end up being an article. On vera.

But all this may have to wait a bit. I'm off today to Chicago, where tomorrow at a tax practice-related conference (at Chicago Kent Law School) I will be discussing the economic substance doctrine in tax law, in terms likely to be more encouraging to the IRS people in attendance than to some of the Chicago practitioners, who I recall as a bit Wild West-style and anti-government compared to the New York practitioners.


Anonymous said...

What do you think about forcing public companies to report their federal taxable income? I like the idea. I'd like to see someone smart (such as yourself), advocate this forcefully....

Daniel Shaviro said...

I don't feel I'm well-informed enough about the claimed confidentiality issues to have a strong view about how far disclosure should go. But I certainly think that, at a minimum, aggregates such as current year taxable income and tax liability should be disclosed. (In theory they are discernable from the financial statements, but I gather in practice hard to figure out due to complications such as deferred items.)

In my new article in progress, I distinguish between the informational approach to book-tax gaps (e.g., the M-3 that now gives the IRS better information reconciling the two, and in the opposite direction your suggestion), and a substantive approach that requires the two measures to be closer together. I am mainly interested for purposes of the paper in the substantive approach, not out of any judgment that it is better but simply because the issues it involves happen to be the ones that interest me right now, and about which I have something (I think) to say.