Accounting for income taxes - the last fifty years

Article Abstract:

The history of accounting for income taxes over the last 50 years is divided into three periods: prior to 1967, 1967 to 1987, and the present situation under Statement of Financial Accounting Standards (SFAS) 96. Each period is reviewed with regard to income tax laws and related accounting practices, and it can be seen that accounting for income taxes has had minimal theoretical growth despite numerous accounting pronouncements. SFAS 96 was issued in Dec 1987 and now requires a liability method of tax allocation. It is an asymmetrical treatment of deferred tax liabilities with a balance sheet orientation. The standard could result in fluctuations in earnings, but these fluctuations may be due entirely to ongoing changes in the tax laws. The full effect of SFAS 96 will become clearer only after the profession gains experience in its application.

History, Accounting, Income tax, Public history

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Specialization: the who, what, and where

Article Abstract:

The issue of accreditation of certified public accountants (CPA) specialists was the subject of a survey among 187 members of the American Institute of Certified Public Accountants (AICPA). The majority of the CPAs favored the national administration of accreditation with uniform requirements. The criteria for specialization indicated by more than 60% of the respondents were testing, experience, and continuing professional education. More than 70% of the group considered personal financial planning and taxation as preferred areas for specialization. Executive directors of state boards of accountancy also responded to the survey and indicate that state authorization of specialization will not occur within the next decade. Directors of state CPA societies prefer national administration, although some state-level society involvement occurs.

Surveys, American Institute of Certified Public Accountants, Accreditation (Education)

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TRPs: definition, responsibilities, penalties. (tax return preparers)

Article Abstract:

The Tax Reform Act of 1976 (TRA 76) broadened the definition of tax return preparers (TRP). When more than one TRP is involved in the preparation of a return, the party preparing a significant schedule should sign the return. The negotiation of a refund check for a client is prohibited, with a $500 penalty for violation. Professional TRP risk not only dollar penalties for violations but also the nonmonetary penalties of felony conviction or damaged reputations. Each IRS district maintains files regarding TRPs that have been investigated to uncover material errors that may demonstrate intentional misconduct. The IRS may also seek an injunction and close a TRP operation without a hearing or conviction.

Management, Tax consultants

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