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does the lack of research consensus about whether managers use the tax accounts to meet or beat prior earnings stem from which measure of prior earnings is used as the benchmark? Both Bauman et al. (2001) and Frank and Rego (2006) use prior year earnings as the benchmark and find no result consistent with this type of earnings management in the VA account. However, Schrand and Wong (2003) find that the valuation allowance is used as hypothesized when they define the prior earnings benchmark as the three-year historical average. In addition, Gupta and Laux (2008) find that tax cushion reversals are used to meet or beat prior earnings when they define prior earnings as earnings from the same quarter, one year previous. A related question is: Why do managers not exploit the subjectivity in the tax accounts to facilitate big baths?
Second, while Gupta et al. (2010) conclude that managers are not using the tax contingency to meet or beat analysts’ earnings forecasts, Cazier et al. (2010) conclude the opposite. Some resolution of this issue is required. Furthermore, Gupta et al. (2010) argue that the increased disclosures that are required under FIN 48 have decreased the use of the tax cushion to manage earnings. Does this mean that firms are now using the other approaches to manipulate the tax expense line item more, or has total management of the tax expense decreased?
Third, we have very little information related to whether and how the users of the financial statements ‘‘see through’’ the earnings management of the tax accounts. Do analysts and the market see through this manipulation? How effectively do the taxing authorities use what is reported in the tax accounts to assess the tax situation of the firm?

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