---
_id: '61491'
abstract:
- lang: eng
  text: We examine behavioral frictions in entrepreneurs’ tax planning when choosing
    between corporate and partnership taxation under a check-the-box rule. Using German
    tax return data, we show that only a small fraction of entrepreneurs opt for corporate
    taxation, despite substantial potential tax savings. A pre registered incentivized
    online experiment demonstrates that complexity aversion, status quo bias, and
    misperception about the corporate tax burden—arising from the interaction of corporate
    and deferred dividend taxation—help explain the preference for partnership taxation.
    We further find that these behavioral frictions heighten liquidity risk under
    the corporate system, particularly in the face of unexpected cash flow needs.
    Finally, a survey of German tax advisors indicates that tax advice only partially
    mitigates these frictions. Some advisors misperceive the benefits of corporate
    taxation, while others anticipate client biases and therefore refrain from recommending
    the corporate tax system.
author:
- first_name: Kay
  full_name: Blaufus, Kay
  last_name: Blaufus
- first_name: Ralf
  full_name: Maiterth, Ralf
  last_name: Maiterth
- first_name: Michael
  full_name: Milde, Michael
  last_name: Milde
- first_name: Caren
  full_name: Sureth-Sloane, Caren
  id: '530'
  last_name: Sureth-Sloane
  orcid: ' 0000-0002-8183-5901'
citation:
  ama: Blaufus K, Maiterth R, Milde M, Sureth-Sloane C. <i>Choosing the Wrong Box?
    Behavioral Frictions and Limits of Tax Advice in Tax Regime Choice </i>.; 2025.
    doi:<a href="https://doi.org/10.2139/ssrn.5378466">10.2139/ssrn.5378466</a>
  apa: Blaufus, K., Maiterth, R., Milde, M., &#38; Sureth-Sloane, C. (2025). <i>Choosing
    the Wrong Box? Behavioral Frictions and Limits of Tax Advice in Tax Regime Choice
    </i>. <a href="https://doi.org/10.2139/ssrn.5378466">https://doi.org/10.2139/ssrn.5378466</a>
  bibtex: '@book{Blaufus_Maiterth_Milde_Sureth-Sloane_2025, series={TRR 266 Accounting
    for Transparency Working Paper Series No. 203}, title={Choosing the Wrong Box?
    Behavioral Frictions and Limits of Tax Advice in Tax Regime Choice }, DOI={<a
    href="https://doi.org/10.2139/ssrn.5378466">10.2139/ssrn.5378466</a>}, author={Blaufus,
    Kay and Maiterth, Ralf and Milde, Michael and Sureth-Sloane, Caren}, year={2025},
    collection={TRR 266 Accounting for Transparency Working Paper Series No. 203}
    }'
  chicago: Blaufus, Kay, Ralf Maiterth, Michael Milde, and Caren Sureth-Sloane. <i>Choosing
    the Wrong Box? Behavioral Frictions and Limits of Tax Advice in Tax Regime Choice
    </i>. TRR 266 Accounting for Transparency Working Paper Series No. 203, 2025.
    <a href="https://doi.org/10.2139/ssrn.5378466">https://doi.org/10.2139/ssrn.5378466</a>.
  ieee: K. Blaufus, R. Maiterth, M. Milde, and C. Sureth-Sloane, <i>Choosing the Wrong
    Box? Behavioral Frictions and Limits of Tax Advice in Tax Regime Choice </i>.
    2025.
  mla: Blaufus, Kay, et al. <i>Choosing the Wrong Box? Behavioral Frictions and Limits
    of Tax Advice in Tax Regime Choice </i>. 2025, doi:<a href="https://doi.org/10.2139/ssrn.5378466">10.2139/ssrn.5378466</a>.
  short: K. Blaufus, R. Maiterth, M. Milde, C. Sureth-Sloane, Choosing the Wrong Box?
    Behavioral Frictions and Limits of Tax Advice in Tax Regime Choice , 2025.
date_created: 2025-10-01T09:26:32Z
date_updated: 2025-10-01T09:29:57Z
department:
- _id: '187'
doi: 10.2139/ssrn.5378466
jel:
- H25
- D91
- D22
keyword:
- Check-the-box
- Legal Form
- Tax Complexity
- Tax Misperception
- Behavioral Taxation
- Tax Advice
language:
- iso: eng
page: '107'
publication_status: published
series_title: TRR 266 Accounting for Transparency Working Paper Series No. 203
status: public
title: 'Choosing the Wrong Box? Behavioral Frictions and Limits of Tax Advice in Tax
  Regime Choice '
type: working_paper
user_id: '97894'
year: '2025'
...