Note from the editors.

The papers in the NTJ March Forum provide three different perspectives on the critical tax policy issue of book-tax conformity--the extent to which accounting for tax purposes conforms to the standards used for financial accounting. Michelle Hanlon and Edward Maydew examine the implications for multinational firms of several recent proposals to conform tax and financial reporting, focusing on potential behavioral responses. Daniel Shaviro reviews recent diverging trends in requirements for book-tax conformity in the United States and in Europe and argues that these trends can be explained in terms of responses to incentive issues and interactions with multinational institutions. Mihir Desai and Dhammika Dharmapala consider the implications of recent evidence linking earnings management and corporate tax avoidance and conclude that greater book-tax conformity would have beneficial effects for both tax authorities and investors. We would like to thank Michelle Hanlon for her assistance in organizing this forum.

John W. Diamond

Forum Editor

George R. Zodrow

William M. Gentry

Editors

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