As a new CPA, you always need to consider the financial accounting implications of proposed tax transactions when you are advising your clients. A transaction in the accounting mainstream may be treated or have a different objective or orientation in the tax environment. The focus on Tax accounting is the Internal Revenue Service. Hence, we focus on calculating, reporting, and predicting one’s tax liability according to legal principles (rules), while considering ethics. Financial accounting is oriented primarily to external stakeholders. Hence, we use GAAP. Your text identifies six steps in the Tax Research Process. One of the steps is to determine the facts in the situation and identify the issues? How will these two steps differ from using the GAAP process in fact-finding?

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Tax research may be defined as the process used to ascertain the optimal answer to a question with tax implications The six steps in Tax research proc... View the full answer