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Tax Avoidance, Near‐Future Earnings, and Resource Availability

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  • Namryoung Lee

Abstract

This study examines the impact of near‐future earnings and resource availability on current‐year tax avoidance behavior from the perspective of both tax and non‐tax costs. Two conclusions are reached. First, when firms expect high‐earnings performance in the near future, they aggressively engage in current‐year tax planning to manage potential future tax and non‐tax costs. Second, firms that expect high‐resource availability in the near future put tax audit risks and resultant non‐tax costs on the front burner. Therefore, they are unlikely to undertake aggressive tax avoidance behavior.

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  • Namryoung Lee, 2020. "Tax Avoidance, Near‐Future Earnings, and Resource Availability," International Review of Finance, International Review of Finance Ltd., vol. 20(2), pages 537-548, June.
    • Handle: RePEc:bla:irvfin:v:20:y:2020:i:2:p:537-548
    DOI: 10.1111/irfi.12221
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    References listed on IDEAS

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