Tax Accountant As A Profession
by Denny Lancaster Tax accounting has been described as both an art and a science, bean counting, number crunching and just plain boring. In all probability all of these descriptions accurately describe an accountant, none of which is very flattering, except for the possible exception of “both an art and a science”
Tax accounting is a science in that past, present and future tax regulations at the federal, state, county and city tax levels must be weighed
in the business decision making process in order to maximize profits and return a fair return on capital invested in a business enterprise. The accountant must present to those who make decisions the fact that alternative methods of operation which produce a profit, also have differing tax consequences. These consequences are not reversible after a decision has been rendered and a profit created, therefore the alternatives should be studied in order to determine which will produce the best after tax profit.
Often there are no alternatives in the decision making process and a clear tax liability must be presented in order to meet the obligations which result.
The art of applying generally accepted accounting principles as they would apply in the business environment and past, present and future tax regulations involves research, knowledge and a little common sense.
Application of the art portion of tax accounting has taken on tremendous proportions, starting with the first major change in the tax code of 1954, with the code changes in 1968, 1986 and 1991. Starting in the early 1970's, tax accountants were “surfing the net” for Library of Congress summations of proposed tax regulations, clarification of code sections, and private letter rulings. The Congressional Record was also reviewed for similar information. When information was found to be beneficial, it was downloaded into the “main frame” and transposed into a “house” word processor, hence tax accountants were using the INTERNET and word processing software, long before the rest of the world saw the light. When CDrom drives became affordable to business, major tax services reduced multi volumes of tax information to a tiny silver disk and research by the tax accountant became a pleasure, rather than a chore. Now citations could be placed in the text of written opinions to business and individuals requesting such information.
Further “scientific” examination must be completed in order to determine the proper classification of accounting information. This task is complicated due to the wide variation of business practices, business jargon, peculiar business needs and diversity of operations in the business spectrum.
Because of this wide diversity, the tax accountant has the unique opportunity to become involved in many businesses at the same time and have a learning experience unparalled by any other profession. The tax accountant must become fully knowledgeable of the particular business in terms of operation, customer base, company personnel and in fact all facets of the businesses operation in order to properly determine whether the accounting information has been presented according to generally accepted principles and render a decision as to the proper tax .
Part of the tax accountants day to day activity involves “number crunching” and is in fact just “plain boring”. Perhaps that is why the soundblaster will blare out “whats happin’ man” or Mr. Spock will say “beam me up Scottie”, just to break the boredom when the tax accountant is working on his PC at the office. Of course, the sound must be muted in order not to disturb anyone.
In closing, I would like to say that in our short time on mother earth there are but two things which are certain... Death and taxes! ************* Denny Lancaster
Senior partner, tax attorney specializing in international finance, who learned ASL and old English signing at age 6, and have used these skills with YMCA groups in camp settings on a continuous basis to help our “special children.” Administer a private foundation, which builds free enabled computers for deaf and blind persons throughout the state of Alabama . . . Still learning HTML and having fun with Lancasters Laughing Place. |
