Current Tax Law and Accounting Practices Term Paper by Nicky

A look at current tax law as it applies to specific issues in accounting.
# 151265 | 927 words | 3 sources | APA | 2012 | US
Published on May 31, 2012 in Accounting (Managerial) , Accounting (Fraud)


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Description:

This paper examines several issues in tax law, emphasizing the changes in the specifics and the consistencies in the generalities of tax laws. Additionally, the paper explores accounting principles, with an emphasis on statutes, GAAP vs. tax accounting, and avoidance vs. evasion. First, the paper considers current sources of tax information and the objectives of tax statutes. Then, it describes Generally Accepted Accounting Principles or GAAP and how it differs from tax accounting. Next, the paper analyzes the difference between tax avoidance and tax evasion, specifically noting that evasion is illegal. The paper conclues by discussing tax loopholes and how they benefit the wealthy.

Outline:

Introduction
Current Sources and Objectives of Tax Statutes
GAAP vs. Tax Accounting
Tax Avoidance vs. Tax Evasion
Conclusion

From the Paper:

"Tax based accounting methods, in the other hand, only provide information regarding expenses and profits that are subject to taxation or entitled to tax benefits. Such accounting practices can work well for individuals with an established budget and an income-to-spending ratio that remains comfortable and flexible, as there is not as great a need to maintain such close scrutiny as long as everything is prepared for taxes (Tribe 2009). Most certified corporate financial statements are also prepared using tax accounting methods, although the reasons here might not be quite as benevolent (Tribe 209). Due to the reduced scrutiny of tax accounting methods, corporations can often legally hide assets and liabilities in their financial statements by using these accounting methods. If the asset/liability does not affect taxation, then it will not be included on the report."
"The difference between tax avoidance and tax evasion is fairly straightforward, and comes down expressly to a question of legality. Al Capone was quite famously arrested for tax evasion; thus "evasion" obviously refers to illegal methods to avoid paying taxes on earnings. Tax avoidance is entirely legal, by definition--it depends upon legal loopholes and shelters as a means of avoiding paying more tax than one has to (Murray 2008). Tax evasion, then, is an attempt to get out of the taxes that one rightly owes..."

Sample of Sources Used:

  • IRS. (209). "Understanding taxes." Accessed 16 October 2009. http://www.irs.gov/app/understandingTaxes/student/whys_thm02_les06.jsp#quickCheck
  • Murray, J. (2008). "Tax avoidance vs. tax evasion." Accessed 16 October 2009. http://biztaxlaw.about.com/b/2008/05/07/tax-avoidance-vs-tax-evasion.htm
  • Tribe, C. (2009). "Comparing GAAP accounting vs. tax accounting." Accessed 16 October 2009. http://www.ehow.com/about_4739681_gaap-accounting-vs-tax-accounting.html

Cite this Term Paper:

APA Format

Current Tax Law and Accounting Practices (2012, May 31) Retrieved September 23, 2019, from https://www.academon.com/term-paper/current-tax-law-and-accounting-practices-151265/

MLA Format

"Current Tax Law and Accounting Practices" 31 May 2012. Web. 23 September. 2019. <https://www.academon.com/term-paper/current-tax-law-and-accounting-practices-151265/>

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