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Elaine Doyle, Jane Frecknall Hughes and Barbara Summers,  An Empirical Analysis of the Ethical Reasoning of Tax Practitioners, 114 J. Bus. Ethics 325 (2013).

The literature on lawyer ethics has been dominated by philosophy and sociology for many years. Consistent with the rise of behavioral economics and the more urgent focus on ethics in business schools, social psychology is increasingly being used to offer insights in the field (see for example Andrew M. Perlman, A Behavioral Theory of Legal Ethics, 90 Ind. L.J. 1639 (2015)). Take Elaine Doyle, Jane Frecknall-Hughes and Barbara Summers‘ piece An Empirical Analysis of the Ethical Reasoning of Tax Practitioners. This piece uses a tax-specific version of Rest’s original Defining Issues Test (DIT) to compare the moral reasoning of Irish tax practitioners and a control group of non-tax specialists. Rest’s DIT is well established and designed to test the level of moral reasoning applied by test respondents when solving. Test takers read moral dilemmas and provide an indication of which kinds of reason they find most important in deciding the moral dilemma. The reasons cover basic justifications like self-interest, rules and ‘post conventional’ principles. The test uses six levels, and the higher up the scale, the higher the level of moral reasoning that is applied by the subject of the test.  Higher levels of performance on the test have been associated with more ethical decision making. The authors study covers tax practitioners (which includes lawyers).

The results the authors claim for the study are: (i) tax practitioners generally reason at lower levels in tax contexts than in social scenarios (i.e. they can decide ethical problems in a more principled manner, but do not in tax situations); (ii) that the professions do not appear to attract people who generally reason at lower levels (i.e. tax does not, on the evidence here, attract particularly bad apples); and (iii) that practitioners’ moral reasoning appears to be affected by training/socialization in their professional context (in particular tax practitioners in private practice demonstrate lower levels of moral reasoning than practitioners working for the Irish revenue service). They summarize their results as follows:

The fact that tax practitioners do not reason significantly differently from non-specialists in the social context sug­gests that individuals whose reasoning is less principled than the norm (as measured by the non-specialist control group) are not self-selecting into the tax profession. …Once the context changed to tax, however, differences in moral reasoning were evident, with tax practitioners utilizing significantly lower level moral reasoning than non-specialists who remained con­sistent in their reasoning across both contexts. This dif­ference was substantial in size, with the level of principled moral reasoning being 34% higher in non-specialists. (P. 333.)

An interesting question is whether we (or they) should care.  Are tax practitioners more prone to a kind of lazy positivism alongside client centrism? The researchers pose the question (reminding this reader of Mertz’s fascinating work, The Language Of Law School, OUP, 2007) arguing that law students become de-ethicalized by learning to think like a lawyer): does the legal reasoning employed by specialists performs inhibits ethical decision-making:

This may be driven by the weight tax practitioners give to legal rules in the tax context, of which non-specialists are unaware, but further analysis is needed before any such conclusions could be reached. (P. 334.)

Yet they go on to doubt the possibility that legitimate positivism is what causes the difference because, in contrast to private practitioners, revenue practitioners, operating in the same legal architecture, are rather different:

Revenue practitioners show a pattern of reasoning that is very similar to non-specialists and their reasoning is not at a significantly different level in either the social or tax contexts(P. 334.)

If they are right about this:

The fact that Revenue practitioners reason dif­ferently from private sector practitioners …indi­cates that tax knowledge and experience are not what is driving the difference between reasoning in the social and tax contexts for practitioners, as Revenue practitioners also possess tax knowledge and years of experience working in tax. Equally, moving from a social context to a work-related context is not driving the difference, as tax is also the working domain for Revenue practitioners. The results suggest that the differences observed in the reasoning of tax practitioners in the tax domain arise only in a private practice environment. While the results do not identify the reasons for the differences in moral reasoning in a private tax practice domain, the differences found may be due to a socialization effect in private sector tax practice. (P. 334.)

A more pithy way of putting this might be that private practitioners in tax become morally inhibited because it pays or because their ethical rules demand (or are perceived as demanding) that they prioritize the client’s interests over others.  A particular kind of professional logic (zealous advocacy) interlocks with commercial logic to inhibit ethical reasoning: a problem potentially well beyond tax law of course. To put the matter in some perspective, the diminution in moral reasoning when tax practitioners in private practice wrestle with tax-based ethical problems puts them on a par with “average senior high stu­dents and are well below the level of adults in general and college students.” Wincingly, they are also, “much lower than …accountants.” Imagine the shame.

Of course there may be other explanations for the results: differences between tax practitioners in private practice and tax practitioners acting as civil servants for the government revenue services extend beyond simply the contexts they work within. Similarly, designing robust, context specific measures of ethical reasoning are not straightforward and their testing requires replication (Moorhead et. al., Designing Ethics Indicators for Legal Services Provision (2012)). But the approach shows how the traditionally more qualitative approaches of sociological inquiry into professional ethicality can be supplemented by significant, quantitative insights from psychology. With the legal profession, especially its elites, rather in love with its own commerciality, work that calls into question the culture of private practice and gives anyone pause to think is to be welcomed. That said, in discussing these findings with private practitioners I find two common responses: one is to be embarrassed and fascinated – it is the sort of work that gives reflective practitioners pause: they sense at the general level how culture may influence professional judgment and this helps them to see it might be a real problem. Another reaction is more hard-nosed, and takes us back to the jurisprudential debates about lawyer zeal: they tell me – morally principled decision making is for clients, I am the lawyer, I merely advise and in that context the rules admit of no ethically principled position.

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Cite as: Richard Moorhead, Care to take a peek into the mind of tax lawyers?, JOTWELL (November 9, 2015) (reviewing Elaine Doyle, Jane Frecknall Hughes and Barbara Summers,  An Empirical Analysis of the Ethical Reasoning of Tax Practitioners, 114 J. Bus. Ethics 325 (2013)),