The principal agent problem has been widely addressed in the literature primarily as part of
organizational law and financial theory. The literature has thus far ignored the role tax law
plays in addressing principal agent problems. On occasion it has referred to one section or
another in the Internal Revenue Code that supports corporate law but it has not yet concretely
highlighted tax law's impact on agency problems much less tax law as a mechanism to address
these problems. This work is based on the proposition that we can use corporate tax law to
mitigate the agency problem. It examines the agency problem through the eyes of tax law. Prima
facie a direct relationship between tax legislation and the principal agent problem may seem
questionable however this work attempts to verify quite the opposite.
