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PARTNERSHIP TAXATION IS ONE OF THE MOST interesting and complex areas of tax accounting that managers in both industry and public practice come across. The partnership 'entity' is designed to [...]

TRANSACTIONS INVOLVING CRYPTOCURRENCIES (also known as virtual currencies) are becoming more and more common. The Internal Revenue Service (IRS) defines virtual currency as a digital representation of value that functions [...]

Several pieces of legislation have made changes to the refundable payroll tax credit since its inception in 2020. THE EMPLOYEE RETENTION CREDIT (ERC) was originally created in the Coronavirus Aid, [...]

One of the major tax benefits of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 (P.L. 116-136) was the modification of the net operating loss rules. In [...]

Corporate social responsibility (CSR) is a term used to describe an organization's awareness of its operations' impact on economic, social, environmental, and governance concerns, as well as the steps it [...]

We investigate how the budget levels embedded in budget-based contracts affect individual effort and risk-taking. We show that, from a wealth maximization perspective, a tradeoff exists between motivating effort and encouraging risk- taking. We illustrate an inverted-U relation between budget levels and effort. Budget levels and effort are positively correlated until budgets become very difficult, at which point individuals 'give up.' We illustrate an opposing, U-shaped, relation between budget levels and risk-taking. Low budgets provide the flexibility to take greater risks, whereas high budgets induce individuals to 'play it safe' to ensure budget attainment. Risky projects provide the greatest probability of reaching very high (stretch) budgets. We conduct a laboratory experiment to empirically test this economic proposition vis-a-vis extant psychology research. Consistent with security-potential/aspiration theory, we find that individuals are willing to sacrifice expected wealth to either meet the budget or increase their potential payoffs. Our results suggest that the effort-risk tradeoff is mitigated at low budget levels, thereby increasing firm welfare, but is exacerbated at high budget levels, reducing firm welfare. Collectively, our results highlight the importance of understanding how managerial accounting practices such as budgets affect the various determinants of performance and not just performance per se. Our results also help reconcile conflicting evidence regarding where budget difficulty levels should be set.

The article discusses the complexities of partnership taxation. Topics covered include contentious areas on the existence in fact of a partnership, whether a payment to a partner is made as a partner or a payment to a third party, and instances of unclarity whether a partnership has been established which is illustrated in a given case. Also noted are eight factors in tax law.