| Résumé: | This experimental study contributes to existing research on a tax authority-tax
practitioner negotiation model during tax audits, by providing the first evidence that
concession timing matters. Negotiations on tax audits facilitate the interaction between
tax practitioners and tax authorities. The role of negotiation in tax audit is to align the
different motivations of tax practitioners and tax authorities. This study permits a better
understanding of the consequences of concession timing negotiation strategies adopted
by the tax authorities on tax practitioners and their final proposed offer. This study
extends the negotiation model in other disciplines to include a new variable, tax
practitioners’ level of aggressiveness and examines the role of fairness in tax audit
negotiations. If tax practitioners perceive that the negotiation strategies adopted by the
tax authorities are unfair to them, they may aggressively try to mitigate their tax payable
by obtaining aggressive tax planning advice from tax practitioners. Thus, this study
offers evidence of the influence of the negotiation strategies adopted by the tax
authorities on the tax practitioners’ final proposed offer, their perception of fairness
(i.e., distributive justice and procedural justice) and their aggressive stance in the tax
audit negotiations. From a practical perspective, this study provides insights to tax
authorities in identifying the most appropriate negotiation strategy to collect
underreported taxes and establish proper procedures to handle grey area or ambiguous
tax issues found during the tax audit period. At the same time, this study also
contributes to the extension of the reciprocity and anchoring effects in taxation and the
effect of concession timing strategies adopted in taxation negotiations, especially in tax
audit negotiations between tax audit officers and tax practitioners.
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