Individual Income Taxes
Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Textbook Question
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Chapter 4, Problem 1DQ

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.

Expert Solution & Answer
Check Mark
To determine

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. 

Conclusion

Thus, above are the uses of income as a measure for federal income tax purpose.

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Chapter 4 Solutions

Individual Income Taxes

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