Advises tax preparers about timing issues, i.e. when an item, such as income, deduction, or credit may be reported on a tax return. Tax accounting rules govern the tax incidents of when tax events must be taken into account for federal income tax purposes. The “when” question is the subject of this book. In general, tax accounting is not concerned with whether an item is includable in income or deductible or even with the character of the item but when it may be reported.
Many of the issues that arise in an audit depend on resolution of tax accounting issues. As a result tax accounting issues have become more and more important and receive more scrutiny in determining tax policy.
Tax practitioners need to have a thorough understanding of tax accounting to be able to analyze and solve tax problems.
Tax accounting is not transactional but periodic which means that on an annual basis taxpayers must determine whether they have income or losses. There are several ameliorative provisions such as net operating losses, the tax benefit rule, etc. which may balance out certain tax accounting principles. Indeed, a substantial portion of every tax problem that practitioners face inevitably involves a tax accounting issue.
Chapter 1 Introduction Chapter 2 Tax Accounting Doctrines Chapter 3 The Entity’s Tax Year Chapter 4 Methods of Accounting Chapter 5 The Cash Receipts and Disbursements Method Chapter 6 The Accrual Method Chapter 7 Change in Accounting Method Chapter 8 Inventory Chapter 9 Uniform Capitalization Rules Chapter 10 Installment/Method Sales Chapter 11 Long-Term Contracts Chapter 12 Domestic Manufacturing Deduction Chapter 13 Distinguishing between Capital Expenditures and Repairs Chapter 14 Time Value of Money
Appendix 1 IRS Form 1128: Application to Adopt, Change, or Retain a Tax Year Appendix 2 IRS Form 8716: Election to Have a Tax Year Other Than a Required Tax Year Appendix 3 IRS Form 2553: Election by a Small Business Corporation Appendix 4 IRS Form 3115: Application for Change in Accounting Method-Repairs Appendix 5 IRS Form 3115: Application for Change in Accounting Method (Blank) Appendix 6 IRS Instructions for Form 3115 Appendix 7 Steps for Determining and Applying the Uniform Capitalization Rules Appendix 8 Capitalizable and Non-Capitalizable Costs Appendix 9 IRS Publication Capitalization Period of Direct and Indirect Costs Appendix 10 IRS UNICAP Flow Chart Appendix 11 IRS Form 6252: Installment Sale Income Appendix 12 IRS Form 8903 Domestic Production Activities Deduction Appendix 13 Form 8697: Interest Computation under the Look-Back Method for Completed Long-Term Contracts Appendix 14 Determination of Tax Year Appendix 15 Cash Method Accounting Flow Charts Appendix 16 Accrual Method Accounting Flow Charts Appendix 17 Change in Accounting Method Appendix 18 Uniform Capitalization Rules Appendix 19 Installment Sales Appendix 20 Long Term Contracts Appendix 21 Lookback Rule