Gil B. Manzon

Boston College | BC · Accounting

We examine whether a taxpayer’s decision to choose a taxpayer-favorable (vs. a taxpayer-unfavorable) characterization of income is associated with contextual and individual dimensions of that decision. Using a 2 × 2 factorial experimental design, we manipulate the prevailing social norm on whether there is a general belief that a specific form of i...

Industries with low effective tax rates could reasonably expect to suffer as a result of legislation designed to increase tax fairness. We analyzed ETRs in two such industries, banking and oil and gas, over a period of time that included two major tax law shifts. Our results suggest that legislation designed to promote tax fairness affects industri...

We examine the disclosure choices of firms subject to the Corporate Alternative Minimum Tax of the Tax Reform Act of 1986 (AMT). We find systematic differences in disclosure choices by firms subject to the AMT consistent with their attempting to influence perceptions of the effectiveness of the AMT. We believe these findings support the inference t...

This study examines publicly traded Chinese firms to identify their incentives to make investments to enhance the credibility of their financial disclosures. The results indicate that firms traded exclusively on the Mainland exchanges are more likely to employ auditors perceived as high-quality (Big 5 affiliated) when they report high returns on eq...

What does Mr. Gamble do when his nonqualified stock options go down in value but are still taxable as ordinary income? He goes to the CEO, Mr. Sensible. What can Mr. Sensible do for Mr. Gamble in his quest to gain back some of his loss by helping ease the money he owes in taxes? Three options are possible: not to help, undo the stock exercise, or g...

Relocation, what are the advantages of relocating a company? What are the disadvantages? Who will benefit from relocation and who will be harmed? What factors are to be considered when thinking about moving a company? What about production operations, marketing and distribution, human resources, stakeholder groups, a unionized workforce and even lo...

We examine the magnitude and sources of difference between income for tax and financial reporting purposes using publicly available data from 1988 to 1998. We find evidence that the book-tax income spread has generally increased over time, but that a relatively small set of variables are able to explain this increase. We also find that these same v...

We examine the proposition that the expected value of future interest tax shields affects firms' preferences for long‐term vs. short‐term debt. We extend prior work that has focused on incremental debt issuances (Newberry and Novack 1999; Guedes and Opler 1996) by examining the maturity structure reflected in the portfolio of firms' outstanding deb...

We examine the effect of marginal tax rates on the decision to retire debt early. Other factors that have been linked to the debt retirement decision are also investigated, including leverage adjustment and the value associated with the immediate recognition of a loss for tax purposes on early retirement. Results indicate that firms that retire deb...

This study provides evidence on the characteristics associated with the completeness of corporate tax reporting by firms subject to the AMT. We find disclosure of tax status is contingent upon the potential costs and benefits of the disclosure. In particular, the variables that are significant in explaining the disclosure decision are consistent wi...

In this study we examine the effect of firms' marginal tax rates on incremental and overall reliance on mandatorily redeemable preferred stock (MRPS). Similarities in the cash flows associated with debt and MRPS, as well as similarities in the claims of holders of debt and MRPS on the assets of issuing firms, suggest that MRPS may be viewed as a su...

In this study we analyse the effective tax rates of corporations from three periods: the years preceding ERTA (1978–1980), the years following ERTA (1982–1985), and the years following TRA86 (1988–1990). We examine differences in the level, distribution, and variation of effective tax rates during these periods and identify factors which explain th...

This article examines the effect of tax factors on the equity values of U.S. multinational corporations making foreign acquisitions. Abnormal stock returns are found to be related to a tax variable that captures differences in the international tax status of acquiring firms but not related to a naive tax variable that captures differences between t...