By the time this column appears, CPAs everywhere are going to be tackling stacks of paperwork for income taxes. This will be true whether they are up to their necks in client returns, or struggling in an audit to reconcile book and tax income in Schedule M.With those pains in mind, it only makes sense that accountants would prefer GAAP accounting for income taxes to be relatively simple.

As for managers, accounting for taxes on the income statement has two goals: to ensure that it looks like they paid their fair share, and that volatile measures and rates of income tax are not revealed. If the management is seen to be tax dodgers, they think that Congress might go after them, and if their reported income is volatile, they think the capital markets might penalize them.

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