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According to the Supreme Court, would it be good tax policy to use income as computed by financial accounting principles as the correct measure of income for Federal income tax purposes? Explain.
Explain the use of income as measure for federal income tax purposes.
Explanation of Solution
As per the Supreme Court in Thor Power Tool Co. vs. Comm.,” the key goal of the financial accounting is to provide necessary information to the management, creditors, shareholders, and all others who are more concerned.”
In this case, accountant acts as a protector of the accounting information from the parties who might mislead the information. Tax system plays a very vital role in making equitable revenue collection from the individuals, company and others.
Thus, above are the uses of income as a measure for federal income tax purpose.
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Chapter 4 Solutions
South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
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Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT