An examination of tax reporting recommendations of professional tax preparers

This study reports on an empirical examination of the decisions of professional tax preparers. The paper is motivated by recent advances in the cognition literature. Based upon this literature we hypothesize that for ambiguous tax matters: (1) recent outcome information will influence the reporting recommendations of tax preparers, and (2) the amount of tax experience interacts with situational economic variables to influence the reporting recommendations of tax preparers. Concerning non-ambiguous tax matters, we hypothesize that (1) situational economic variables will affect recommendations made by tax preparers, and (2) neither recent outcome information nor years of experience will influence the recommendations made by tax preparers. The results of an experiment generally provide support for the hypotheses.