The Sympathy Factor: How Client Stories Influence Tax Professionals' Judgments and Recommendations

New research reveals that tax professionals' judgment and decision-making can be swayed by their emotional responses to a client's situation.

Tax professionals have a dual role: they need to be objective and follow tax laws, but they also advocate for their clients. Mary Marshall, an Assistant Professor of Accounting at PSU, conducted the experiment with her coauthors, Doug Prawitt and Brian Spilker, both from Brigham Young University. The team asked tax professionals to evaluate a transaction where the client's reason for needing a favorable tax outcome was either positive (selflessly helping someone else) or negative (selfishly harming someone else). Researchers found that professionals were more likely to favor clients when they felt sympathetic towards the client.

“This paper highlights the potential for emotional bias to interfere with a tax professional's ability to make objective judgments,” Marshall noted. The findings suggest that tax professionals may unintentionally allow their feelings to influence their decisions, which could lead to biased judgments or recommendations and cause professionals to unintentionally recommend more risky decisions than they intended.

The authors drew on the attribution-affect-action (AAA) model, which suggests that when we see someone in need, our emotional response influences our willingness to help. Although most research utilizing the AAA model focuses on helping behaviors in fields like social services, this paper finds support for the AAA model in a context where tax professionals are providing an economic recommendation for a client seeking assistance with minimizing their taxes.

Tax professionals often work with clients for several years, which offers many opportunities for learning about their client’s personal life. Marshall points out that this study is potentially informative for tax professionals, adding that “the findings highlight how important it is to consider whether knowledge about their clients’ personal lives may influence how tax professionals make recommendations that should be objective.”

The study entitled “The influence of tax professionals’ attributions and affective reactions on judgments and recommendations” is being published in Behavioral Research in Accounting.

If you would like a copy of this article, please contact Mary Marshall at memarshall@pdx.edu.