Determinants of the Choice Between Partial and Comprehensive Income Tax Allocation: The Case of the Domestic International Sales Corporation.

Key Points

• This research investigates why managers choose between partial and comprehensive income tax allocation for Domestic International Sales Corporations (DISCs).
• Analyzed responses from external auditors regarding tax allocation preferences
• Examined the connection between auditors' positions and the chosen tax allocation methods
• Investigated the institutional context surrounding DISCs
• Found significant associations between auditors' stated positions and the choice of tax allocation method
• Demonstrated differences in allocation preferences based on institutional factors
• Indicated that company practices may stem from the indefinite tax deferral policy for DISCs