Document Type



New York University Journal of Law and Business, Vol. 11, 2014


For over a century, politicians, government officials and scholars in the United States have debated whether corporate tax returns, which are currently subject to broad tax privacy protections, should be publicly accessible. The ongoing global discussion of base erosion and profit shifting by multinational corporations has generated calls for greater tax transparency. Throughout this debate, participants have focused exclusively on the potential reactions of a corporation’s managers, shareholders and consumers to a corporation’s disclosure of its own tax return information. There is, however, another perspective: how would the ability of a corporation’s stakeholders and agents to observe other corporations’ tax return information affect the corporation’s compliance with the tax law?

This Article examines the relationship of corporate tax privacy and tax compliance from this new vantage point, which it terms the “intercorporate perspective.” The primary claim of this Article is that corporate tax privacy may limit the pressure to engage in more aggressive tax planning and reporting that corporate tax directors face from significant shareholders, non-tax managers, and even themselves. Specifically, tax privacy provides the government with valuable strategic defenses by restraining the ability of a corporation’s stakeholders and agents to engage in benchmarking and reverse engineering, behaviors that would likely cause some tax directors to pursue more aggressive tax planning and reporting. Yet increased public access would also enrich public awareness and debate of corporate tax reform issues, which could motivate legislators to act.

The result of this analysis, thus, is not a recommendation that all corporate tax return information should receive tax privacy protections. Rather, this Article offers a set of guidelines, including consideration of the strategic defenses of corporate tax privacy, which will better equip policymakers to evaluate specific proposals to make corporate tax return information public.

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tax aggressiveness, corporate tax abuse, tax shelter, reputation, shaming, disclosure, IRS, penalties