企业纳税人对基于规模的执法与披露门槛的反应

• We study the responses of corporations to sized-based enforcement and disclosure thresholds using tax return data from 2000 to 2010. • We employ bunching estimators to quantify how corporations manipulate assets to avoid additional disclosure or higher audit risk. • Results suggest that corporations reduce assets by about $500,000 to avoid the $10 million asset threshold that requires filing Schedule M-3 and results in increased audit risk. • A DiD estimator shows that C-corp assets remain $1m below similarly sized S-corps after 2004, when size-based thresholds became more salient. This study uses administrative tax return and audit data to examine the effects of three Internal Revenue Service (IRS) enforcement policies focused on large corporations. The IRS Large Business and International Division’s monitoring threshold increased from $5 million in 2000 and 2001 to $10 million in assets starting in 2002. Starting in tax year 2004, the IRS requires C corporations with at least $10 million in assets to file Schedule M-3, which reconciles book and taxable incomes. In the same year, audit rates jumped discretely at the $10 million asset threshold. We find that C corporations strategically bunch below this threshold in most years from 2004 to 2010. Using variation in audit rates around the $10 million asset threshold over time and the staggered Schedule M-3 implementation dates for C corporations and S corporations, our evidence collectively suggests C corporations bunch below the threshold primarily to avoid higher audit rates. A triple difference estimator shows that the enforcement notch at $10 million in assets has persistent effects on corporation size.