Date of Award

Summer 2005

Document Type


Degree Name

Doctor of Business Administration (DBA)


School of Accountancy

First Advisor

Ted D. Englebrecht


Normative decision theory describes the judgment and decision-making process as a cost/benefit analysis based upon maximum utility. One assumption of the theory is full rationality for choices made throughout the process. Due to bounded rationality, however, mental shortcuts become necessary. Use of these shortcuts does not necessarily diminish the quality of the decision. However, a suboptimal use of a heuristic results in a biased decision.

Kahneman and Tversky (1979) identify three basic heuristics: availability, representativeness, and anchoring and adjusting. One suboptimal use of the anchoring and adjusting heuristic, confirmation bias, is the unconscious search for and evaluation of information that confirms one's desired decision outcome while ignoring disconfirming information. In an adversarial legal contest, relying on biased research diminishes the probability of prevailing (Johnson 1993).

The intent of this research inquiry is to use archival data to test for the presence of confirmation bias in the defenses presented by the litigants in Tax Court Memorandum Opinions. The data sample consists of the briefs presented to the Court by both litigants, taxpayer and Internal Revenue Service, in 106 of the 288 rendered Memorandum Decisions in 2004.

Summary statistics from the data show that 51.85% of taxpayers represent themselves (i.e., pro se) in the contentious proceedings. The remaining taxpayers employ tax professionals to provide the defense. The IRS has a contingent of legal counsel to present their position. Non-parametric statistical testing provides evidence that defenses presented by pro se taxpayers show more bias than defenses provided by tax professionals. In turn, taxpayers' professional representatives present more biased defenses than do the IRS professional representatives.

This research inquiry adds external validity to the extant literature on biased research recommendations resulting from the tax research task. That is, numerous identified incentives promote susceptibility to the use of confirmatory decision-making strategies. As shown in this study, incentives impact practitioners differently than government employees. Remedial measures, including education, task-specific experience, and accountability can reduce this proclivity. Pro se taxpayers, with no legal education, experience, or accountability, show a greater degree of bias in their defenses than do tax professionals.

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