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INCOME TAX PROJECT 1 (ACCOUNTING, March 20, 1950)

handle is hein.ali/aliftp0034 and id is 1 raw text is: March 20, 1950 ACCOUNTING Introduction Tax accounting, for the most part, follows ordinary accounting prac- tice. However, in some areas, tax accotnting takes its own path partly be- cause of reasons of administrative policy, portly because ta accounting has simply gotten off on the wrong foot. The Draft, especia.ly as respects accrual accounting, attempts to harmonize tax practice with business prac- tice except where tax policy continues to demand a divergence. The Draft, in contrast with the very general existing statutory pro- visions, contains a number of rules governing some of the troublesome situa- tions which have arisen under the existing law. These rules are moinly restrictiono against certain tax accounting rules which have been developed at the urgency of the Commissioner. The relaxation of these rules, besides bringing tax accounting closer to business accounting, should decrease tax- payer and accounting profession resentment and thus lighten the problems of administration. Section references in the material followin& ere to Preliminary Draft No. 32. ,'I-