Taxes and Business Strategy, 6e

by Erickson, Hanlon, Maydew, Shevlin

ISBN: 9781618533210 | Copyright 2020

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Welcome to the sixth edition of Taxes and Business Strategy. 

Through integration with traditional MBA topics, Taxes and Business Strategy provides a framework for understanding how taxes affect decision-making, asset prices, equilibrium returns, and the financial and operational structure of firms.

Target Audience

For MBA students and graduates embarking on careers in investment banking, corporate finance, strategy consulting, money management, or venture capital. Also great for entrepreneurs and for general knowledge of personal financial planning.

Relevancy

All four authors actively teach the tax and business strategy course and provide relevant examples from both classroom and real-world consulting experience.

Practical Uses for Business Strategy

Learn the practical uses for business strategy that can be applied to your everyday life.

In-depth Analysis

Analysis and explanatory material help the reader understand, think about, and retain information.


  • Updated for the Tax Cuts and Jobs Act 
    • Organizational form chapter updated to incorporate the Qualified Business Income Deduction for pass through entities.
    • International tax chapters updated to incorporate a broad discussion of available options for taxing multinational activity and the methods chosen in the TCJA, including the GILTI, the BEAT, and the FDII.
  • Tax rates and other rules updated throughout the book
  • Combined prior chapters 5 and 7 to streamline the book
  • Combined prior chapters 10 and 11 to streamline international tax coverage
  • Added a new Savings Vehicle in chapter 3
  • Solutions Manual


Merle Erickson

Merle Erickson

Merle Erickson is Professor of Accounting at the Booth School of Business at the University of Chicago.

Professor Erickson teaches “Taxes and Business Strategy” at Booth and has taught the course for more than twenty-five years. He has published numerous articles in a variety of top academic journals, and from 2005-2011, he served as a co-editor of the Journal of Accounting Research.

Over the course of his career, he has consulted on complex GAAP and tax accounting issues (e.g., debt versus equity, accounting for mergers, acquisitions and divestitures [e.g., spin-offs, leveraged partnerships, reverse Morris Trust transactions]) in a variety of contexts (e.g., bankruptcy, various private equity transactions, tax receivable agreements, tax sharing agreements, shareholder disputes, partnership and LLC arrangements, and various types of tax advantaged transactions). His clients have included, among others, the U.S. Department of Justice, the Internal Revenue Service, Fortune 500 companies in various industries, international financial institutions, private equity firms, law firms, accounting firms, and individual taxpayers. He has also assisted corporations with SEC, IRS and whistleblower investigations.

Prior to entering academia, he assisted the U.S. Government in its prosecution of the Lincoln Saving & Loan case. He subsequently published an academic article and teaching case relating to the audit failure associated with the Lincoln Saving & Loan case. That teaching case has been used by the Big 4 to train junior auditors.

He has been given several awards for his research and teaching. In addition to teaching graduate students at Chicago Booth, Erickson has taught courses to Morgan Stanley, Merrill Lynch, General Electric Capital Corporation, Baker McKenzie, Andersen Consulting, Accenture, CareerBuilder, and the IWI (Investments and Wealth Institute) among others. He was named one of BusinessWeek's Outstanding Faculty at the University of Chicago. He is the faculty director of the Booth Mergers and Acquisitions course for Executives, and is the also the faculty director of the Booth Certified Private Wealth Advisor (CPWA) program.

Erickson earned a bachelor's degree in accounting from Rockhurst College in 1987, an MBA in 1989 from Arizona State University, and a PhD in accounting from the University of Arizona in 1996. He joined the Chicago Booth faculty in 1996. 

In addition to his scholarly activities, Erickson is an avid fisherman. His angling pursuits have taken him from the pristine wilderness lakes of northern Canada to some of the remotest stretches of the Great Barrier Reef. He received the Angler Award from the Billfish Foundation in 2003 for catching and releasing the most striped marlin worldwide that year.



Michelle L. Hanlon

Michelle L. Hanlon

Michelle L. Hanlon is the Howard W. Johnson Professor and Deputy Dean for Faculty and Research at the MIT Sloan School of Management.

Professor Hanlon has taught undergraduates, MBA students, Executive MBA students, and Masters of Finance students. She is the winner of the 2021 Outstanding MBA Teacher Award, the 2020 MIT Teaching with Digital Technology Award, and the 2013 Jamieson Prize for Excellence in Teaching at MIT Sloan.

Professor Hanlon’s research focuses primarily on the intersection of financial accounting and taxation. She has published research studies in all of the top accounting and finance journals and the leading field journals in taxation in accounting and economics. She has won many awards for her research including the Distinguished Contribution to the Accounting Literature Award from the American Accounting Association, being named a Presidential Scholar by the American Accounting Association, and many others. Professor Hanlon has served on several editorial boards and served as one of the senior editors at the Journal of Accounting and Economics for over 15 years.  Professor Hanlon is a co-author on two other textbooks: Financial Accounting, entering its seventh edition, and Intermediate Accounting, entering its fourth edition. She has testified in front of the U.S. Senate Committee on Finance and twice to the U.S. House of Representatives Committee on Ways and Means about tax and accounting issues. She served as a U.S. delegate to the American-Swiss Young Leaders Conference in 2010 and worked as an Academic Fellow at the U.S. House Ways and Means Committee in 2015. She served on the Tax Expenditure Commission for the Commonwealth of Massachusetts and serves on the academic advisory board to the International Tax Policy Forum, Washington, DC.

She earned her doctorate degree at the University of Washington. Prior to joining MIT, she was a faculty member at the University of Michigan. She worked at KPMG prior to earning her PhD.



Edward L. Maydew

Edward L. Maydew

Ed Maydew is the David E. Hoffman Distinguished Professor of Accounting and the Senior Executive Director of the UNC Tax Center. His teaching and research interests include taxation and accounting, the intersection of the two, and their roles in economic decisions.

Dr. Maydew has served as an editor of The Accounting Review, and on the editorial boards of Journal of Accounting and Economics, Journal of Accounting Research, and Review of Accounting Studies. He has published his research in the leading academic journals in his field, including Journal of Accounting and EconomicsJournal of Accounting ResearchThe Accounting ReviewReview of Accounting Studies, Journal of FinanceJournal of Financial Economics, and others. He has consulted with leading firms on complex tax and accounting matters.

Professor Maydew has received awards for excellence in research and teaching, including the Distinguished Contributions to the Accounting Literature Award from the American Accounting Association. He has won the American Taxation Association’s Outstanding Manuscript Award three times. He was named by BusinessWeek as one of the top professors at the University of North Carolina and prior to that, the University of Chicago. At UNC, he has been recognized as an MBA Teaching “All Star” more than ten times and received four Weatherspoon Awards for Excellence in Teaching.

Professor Maydew has been a visiting professor at Cornell University, the University of Iowa, and the Massachusetts Institute of Technology. Before joining UNC, Professor Maydew was on the faculty of the University of Chicago. He received his PhD from the University of Iowa and BBA from Iowa State University. Before earning his PhD, he was employed by a predecessor of PwC in its Chicago office.


Terry Shevlin

Terry Shevlin

Terry Shevlin is a Distinguished Professor Emeritus of accounting at UCI Paul Merage School of Business.

After earning his Ph.D. from Stanford University in 1986, Professor Shevlin served on the University of Washington faculty for over 25 years before joining the University of California, Irvine in 2012, where he remained until his retirement as a UCI Distinguished Professor in 2023. He was inducted in the American Accounting Association’s Accounting Hall of Fame in 2025 and the Australian Accounting Hall of Fame in 2024.

Professor Shevlin was President of the American Accounting Association 2019–2020, AAA President-Elect 2018–1019, AAA Vice President-Research and Publications 2015–2018, and chaired the AAA Publications Committee 2013–2016. He has served as editor on three academic journals: Journal of the American Taxation Association (1996-1999), Senior Editor, The Accounting Review (2002-2005) and Co-editor, Accounting Horizons (2009-2012), and on numerous editorial boards (including the top four accounting journals). He has published 100 manuscripts and three discussions, with over 60 of these appearing in top-tier accounting journals such as Journal of Accounting Research, The Accounting Review, Journal of Accounting and Economics, Contemporary Accounting Research, and Review of Accounting Studies.

Professor Shevlin served as Associate Dean for Research and Doctoral Programs at the Merage School of Business at UCI. He held the Paul Merage Chair in Business Growth at UCI. He held the Paul Pigott/ Paccar Professor of Business Administration from 2004–2012 at Washington. While at Washington, he held various administrative positions, including faculty director of the PhD Program 1998–2006 and Accounting Department Chair from 2006–2012.

Professor Shevlin has been a dedicated mentor, shaping the careers of future accounting scholars. He has chaired 28 doctoral dissertations and served on 32 other Ph.D. committees. His mentees have secured and retained positions at top academic institutions worldwide. His academic descendants have collectively published nearly 400 papers, received over 68,000 citations, and taught accounting to more than 100,000 students globally. Professor Shevlin has received a number of awards for his research and mentoring of PhDs. In addition to his Hall of Fame inductions, he was named the American Accounting Association Outstanding Educator for 2012; the American Taxation Association 2005 Ray M. Sommerfeld Outstanding Tax Educator; and received the American Taxation Association Lifetime Service Award in 2022. He has won the American Taxation Association Tax Manuscript Award four times (in 2017, 2004, 1995, and 1992) and twice won the AAA Competitive Manuscript for young scholars (1990 and 1987). He was awarded the UW Business School Dean’s Faculty Research Award four times. He was awarded the Merage Senior Faculty Research Award in 2021 and 2022.

His research interests are broad and include the effect of taxes on business decisions and asset prices, capital markets-based accounting research, earnings management, research design and statistical significance testing issues. His teaching interests are financial accounting, taxes and business decisions, and empirical research methodology. He has spoken at numerous doctoral consortiums.



Errata
Last Updated: Nov 5 2021

Corrections to identified errors in the text.

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