Keep Your Story Straight: Differing Inventory Values Yield a Tax Deficiency

tax accountingThere are differences between the generally accepted accounting standards that drive financial accounting and the statutory standards that govern tax accounting. For example, an expense that is accrued for financial reporting purposes may not be recognized for tax purposes until economic performance is complete under section 461(h) of the Internal Revenue Code.

While some disparity between a company’s performance as reported on its financial statements and on its tax returns is to be expected, gross disparities can be problematic, as illustrated by a recent First Circuit decision, Transupport, Inc. v. Commissioner, No. 17-1265, 2018 U.S. App. LEXIS 3426 (1st Cir.… Read More