Tax Law and Accounting Paper

"Debate on the question of correlation between taxable income and financial income has run hot and heavy for many years," said Harold E. Arnett, Associate Professor of Accounting at the University of Michigan. This essay is going to summarize the sources of modern income tax statutes, summarize the objectives of modern income tax statutes and compare and contrast generally accepted accounting principles. There are three sources of modern income tax statutes which are legislative, executive …

…modern tax statutes include several considerations such as revenue needs, economic, social, equity and political considerations. Finally, tax accounting and GAAP have there conflicts but as Arnett states the goal for financial accounting associations should be, "...to aid Congress and the Internal Revenue Service, in an advisory capacity, to reach its objectives in a manner which results in the most fair and equitable taxation of the taxpaying units, whether these be individuals or business units."