Using panel data on the population of corporate tax-returns of Armenian firms, this project studies the behavioral response of firms to three size-dependent regulations: i) a tax-notch created by the value added tax (VAT) registration threshold; ii) an administrative-notch below which the frequency of filing and paying VAT and corporate income taxes declines from monthly to quarterly; and iii) an accounting-notch where International Financial Reporting Standards become mandatory. The evidence points towards strong response to the latter treatment, a moderate response to the administrative-notch, and no response to the VAT-notch. Based on the results of tax-audits -- performed at about every fifth firm each year – the project then provides with evidence suggesting that the bunching-response of firms is almost entirely driven by income under-reporting.