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This study documents that an outcome-favorable bias is greater when the quantity of information describing a balanced tax-decision context is substantially increased. Second, the study demonstrates that an outcome-favorable bias can be offset by the use of principles-based ethical standards. Specifically, we examine the effect of AICPA Code of Conduct Section 54 for integrity and Rule 102-6 for advocacy. Students volunteered to participate in this study examining the manner in which accounting novices initially process principles-based standards. Prior studies using student subjects in an audit setting have found that principles-based standards were effective only when students had high levels of moral reasoning (Herron & Gilbertson, 2004), and rules-based technical standards had no impact on student subjects when making financial adjustments (Pflugrath, Martinov-Bennie, & Chen, 2007). If professional standards increasingly rely on principles-based standards, then understanding the impact of such standards on future entrants into the profession would provide guidance in the creation and implementation of future standards, as well as assist educators in the development of accounting curricula. We extend the pattern of past research to a tax setting and show that tax-saving recommendations are a function of the presence of a professional standard and the level of contextual detail.

This study summarizes an IRS database that includes over 500 Customer Satisfaction Surveys (CSS) from individual taxpayers who were field audited in 1998. Descriptive statistics are provided indicating that most taxpayers were satisfied with the audit process. Most questions on the IRS survey were associated with overall audit attitude. Two variables affecting audit attitudes were additional tax assessments and use of a paid preparer. Those owing additional taxes as a result of the audit were more likely to have a negative attitude toward the audit process. Those using a paid preparer also tended to have a more negative attitude. The paper discusses reasons why those with preparer assistance were more disappointed (e.g. IRS examiner was not knowledgeable, audit took too long, and the audit outcome was worse than expected).

This study investigates taxpayers' assessments of what they believe to be fair amounts of federal income taxes for families that differ with regard to the number of dependent children, the number of spouses employed, and marital status. Three-hundred-and-sixty-six prospective jurors from Alabama and Colorado participated in the experiment. In a between-subjects design, tax liabilities were: (1) lower when households included dependent children, (2) the same regardless of whether one or both spouses generated the income, and (3) the same for married couples and singles with the same total incomes. Participants did not assess taxes so as to avoid a marriage penalty; instead, they assessed taxes in a manner that avoided a single's penalty, even though approximately three-fourths of the participants were married. Further, contrary to current tax policy, within-subject results suggest that participants consider it fair for a single parent to pay significantly less tax than a married couple with a child.