Academic research for your practice consideration.

• Author: Meade, Janet A.

One year ago, this column featured four published examples of academic research of interest and relevance to tax practitioners (Meade, "Campus to Clients: Practitioners Can Benefit From Academic Tax Research," 51 The Tax Adviser 532 (August 2020), available at tinyurl.com/yedy7ahe). This year another four published articles by tax academics are highlighted. The process by which these articles were selected is the same as last year: Articles were nominated and evaluated by members of the American Taxation Association's (ATA's) External Relations Committee, which sought to identify academic tax research that was timely and relevant to tax practitioners. The ATA is the leading organization of tax academics, and its External Relations Committee strives to bridge the gap between tax academics and tax practitioners.

Academic tax research, like other types of academic research, begins with a question. In many instances this question is prompted by conversations with, or the writings of, tax practitioners. The question is then translated into a testable hypothesis, and this is framed within the context of prior studies and related literature. Data is then collected, and rigorous statistical analyses are performed. Alternatively, academic research can delve into a technical analysis or critique of a tax provision or policy matter, as one of the articles highlighted this year illustrates.

Researchers typically present their findings to peers. Based on feedback received during these presentations, researchers may modify their study or expand the analyses with the aim of submitting their work to a high-quality academic journal.

The journal review process imposes additional demands on the research. As detailed in the earlier column, academic manuscripts are generally critiqued by a journal editor and two reviewers knowledgeable in the area. Manuscripts often undergo numerous revisions, and acceptance rates at top journals are low. For the journals represented in this column, acceptance rates average between 10% and 20%.

'An Experimental Investigation of Tax Professionals' Contentious Interactions With Clients'

In this article about certain difficult client interactions, published in the Fall 2019 issue of The Journal of the American Taxation Association (Vol. 41, Issue 2), authors Donna Bobek, Derek Dalton, Amy Hageman, and Robin Radtke examined how tax professionals persuade clients to abandon overly aggressive tax positions while still acting as advocates for the client. The authors also explored ways public accounting firms can help tax professionals successfully handle contentious interactions with clients.

The authors employed an experimental questionnaire to gather descriptive data from 89 tax professionals about their personal interactions with clients. Among the persuasive arguments used, 75% of the surveyed tax professionals informed the client that there is no substantial authority for the client's position, and 74% warned the client of potential penalties. Other frequently used arguments include telling the client that there is not a reasonable basis for the position (61%), the audit risk is high (49%), and an audit by the taxing authority may uncover other items (47%). The most common types of contentious tax issues faced by the respondents involved deductions (18%), business versus personal (15%), S corporations (12%), revenue recognition (11%), and foreign or state questions (10%).

Regarding issue outcomes, 73% of respondents indicated that they were able to reach an agreement with the client. However, only 44% of the respondents stated that the agreed-upon outcome was the position originally recommended by the tax...