Essay on Tax Law And Accounting - 1395 Words

Tax Law and Accounting In todays society income taxes are something in which almost everyone is familiar. However, the tax law and general purpose of income taxes is something in which the general society gives little thought. In addition, few tax preparers are aware that differences exist between the Generally Accepted Accounting Principles (GAAP) and tax accounting, not to mention the ramifications of avoiding or evading to proper complete the reporting of income taxes. This paper will discuss the objectives of modern tax law, the differences between Generally Accepted Accounting Principles (GAAP) and tax accounting as well as the differences between tax evasion and tax avoidance. Objectives of Modern Tax Law William Perez explains†¦show more content†¦Throughout the history of the United States various Acts and Amendments have been enacted to help the government to constitutionally and effectively collect income taxes. The Sixteen Amendment to the Constitution gave Congress the power to lay and collect taxes on income (Pope, Anderson, Kramer, 2007, page 1-2). In 1954, a codification of the tax laws went into effect and was known as the Internal Revenue Code of 1954. Throughout the years various amendments to the Code have taken place. However, the major structure of tax law has been consistent throughout the years. Tax law is structured to include the criteria of equity, certainty, convenience, and economy as well as a fifth criterion of simplicity (Pope et al., 2007, page 1-11). All in all, the objective of modern income tax statutes is to provide a means for the United States to collect monies on income earned by the citizens and/or businesses of the country to help pay for the numerous expenses that the United States amasses. GAAP and Tax Accounting Differences George Plesko points out that Generally Accepted Accounting Principles (GAAP) were established by the Financial Accounting Standards Board (FASB) to help report the financial position of an organization through the use of financial statements. On the other hand, reporting taxes was intended as a means to collect revenues in an equitable and efficient manner (2002, page 1,  ¶ 1). Plesko also suggests that while financial accountingShow MoreRelatedTax Law and Accounting Paper1300 Words   |  6 PagesTax Law and Accounting Paper In today’s financial world, preparation and reporting of income taxes has become one among the other main reasons why individuals and businesses are keeping and maintain their financial records. However, there has been some controversy between tax laws and accounting under the General Accepted Accounting Principles (GAAP). Simply because IRS is not always agrees with GAAP’s principles and thus creates its own tax laws. This paper will discuss the objectives of modernRead MoreReasons for Low Pass Rates in Financial Accounting, Management Accounting and Tax Law Amd Practice at the Chitungwiza/Harare Region of the Zimbabwe Open University3431 Words   |  14 PagesFACULTY OF COMMERCE AND LAW(DEPARTMENT OF BANKING AND FINANCE) RESEARCH TOPIC: A STUDY TO DETERMINE THE REASONS For LOW PASS RATES IN MANAGEMENT ACCOUNTING AND TAX LAW AND PRACTICE- BACHELOR OF COMMERCE IN ACCOUNTING, BANKING AND FINANCE AT THE HARARE AND CHITUNGWIZA REGION OF THE ZIMBABWE OPEN UNIVERSITY. ABSTRACT: Background: A study of the results of Management Accounting and Tax, Law and Practice for the past three semesters revealed average pass rates of 33 and 35% respectivelyRead MoreTax Law1266 Words   |  6 Pagesof modern income tax statutes. The primary source of US tax law is Congress. 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Congress and therefore the President ofRead MoreAccounting Systems At The International Level1387 Words   |  6 PagesAccounting is one of the oldest social sciences disciplines whose development has been affected by a variety of historical, economic, social-cultural and institutional factors. In essence, although the discipline is currently harmonized across different nations, accounting systems have been influenced by different national traits, a factor that also influenced the differences in accounting systems at the international level. In general, the accounting systems in use in different countries have developedRead MoreTemporary Differences1346 Words   |  6 PagesDifferences SFAS No. 109, â€Å"Accounting for Income Taxes,† requires inter-period tax allocation for temporary differences. Required: a. Define the term temporary difference. b. List the examples of temporary differences contained in SFAS No. 109. c. Defend inter-period income tax allocation. a. Temporary Difference – Definition An assumption inherent in an enterprise s statement of financial position prepared in accordance with generally accepted accounting principles is that theRead MoreThe Different Roles Of The Accounting Profession1305 Words   |  6 PagesThe Different Roles of the Accounting Profession Module by: Link-Systems International, Inc.. E-mail the author Summary: Demo/Sample Learning Object in Accounting Note: You are viewing an old style version of this document. The new style version is available here. Links [hide links] Supplemental links Weakly related linkThe Salvation Army Weakly related linkAmazon.com Weakly related linkGoogle Weakly related linkTwitter Weakly related linkVerizonRead MoreThe Key Causes For Tax Evasion1587 Words   |  7 Pagesnormally not do. Motivation is the key cause for tax evasion, since it helps avoid a massive proportion of expenses that would generally be incurred. As illustrated by the case study that was provided by the Australian Financial Review, a small number of people do heavy tax lifting as opposed to the rest of the population. This means that there are a few people that earn a significant amount of money and due to progressive tax rates, the overall amount of tax that this small group of individuals would