This file describes the estimates of the IRS Audit Adjustment Score in Table 7 of the following paper (please reference when using this formula): "Taxes and Financial Constraints: Evidence from Linguistic Cues" by Kelvin K. F. Law and Lillian F. Mills, 2015, Journal of Accounting Research 53(4): 777-819.

It is computed as [0.02433 + (-0.00797*Firm size) + (-0.01298*Property, plant, and equipment) + (0.22349*Research and development)+(-0.00927*Merger and acquisition) +(0.85483*Foreign income)+ (-0.00559*Ln number of countries) + (0.01282*Use of tax haven) + (-0.00704*Equity earnings) + (-0.09754*Mezzanine finance) + (-0.38884*Other comprehensive income) + (0.01844*Deferred revenue) + (0.03145*Stock compensation expenses) + (-0.01322*Tax loss carry-forward) + (-0.00496*Wholesale, retail, and transportation) + (-0.08079*Change in tax loss carry-forward) + (0.06320*Returns on assets) + (0.05283*Leverage)+ (-0.04355*Intangible assets) + (0.01787*Lag market-to-book ratio) + (2.16229*Use of negative words)]. Higher score means higher propensity of audit adjustments from the IRS.

Please refer to the Appendix in Law and Mills (2015 JAR) for the construction details of each of these firm-level variables. Hope the formula is helpful for your research.