Appropriate Accounting Treatment Regarding Evade 's Virginia State Sales Taxes

Hoffman, W., Maloney, D., Raabe, W., & Young, J. (2013). Federal Taxation Comprehensive Volume. (36 ed.). Ohio: South-W

25-7 If a loss cannot be accrued in the period when ti is probable that an asset had been impaired or a liability had been incurred because the amount of loss cannot be reasonable estimated, the loss shall be charged to the income of the period in which the loss can be reasonably estimated and shall not be charged retroactively to an earlier period. All estimated losses for loss contingencies shall be charged to income rather than charging some to income and others to retained earnings as prior period adjustments.”

An accrual is not made for a loss contingency because any of the conditions in paragraph 450-20-25-2 are not met., b.  An exposure to loss exists in excess of the amount accrued pursuant to the provisions of paragraph 450-20-30-1.” Therefore, they also need to disclose the range of the possible loss with some explanation.

As per ASC 450-20-25-2, entities should accrue an estimated loss from a loss contingency by a charge to expense and a liability recorded only if both of the following conditions are met:

The installment method is not provided to all taxpayers, and this method may not be used in the event that the property was disposed at a loss. it cannot be used by dealers in real and personal property, for sale of personal property under revolving credit plan, or for sales of depreciable property to a controlled entity. The taxpayer must prove to the Internal Revenue Service that the tax avoidance was not a principal purpose of the

With the advancements in the globalization of the economy, corporations are finding more ways to avoid the extraordinary tax rates set in place of The United States Of America. With the loss of revenue from large companies dodging taxes the government must make up for the loss by either raising taxes or changing the tax code. A recent company to avoid american taxes is Johnson Controls, a company that “…would not exist as it is today but for American taxpayers, who paid $80 billion in 2008…”(The Editorial Board). This use of American resources to get through tough times, and run to another county during an economic incline is an act that calls for reform in the American tax system. However congress has not passed any legislation to fix the

Retail sales taxes are one of the best ways to collect tax revenue. If the tax rates are high in one state, then a consumer can shop online to avoid excessive sales taxes in another state. This is why many states are pushing Congress to adopt legislation to make all online retailers pay sales-tax regardless of their state of operation. Sales taxes through internet transactions have become a hot topic in the political arena, and there are plenty of politicians who are in agreement of collecting taxes from the internet including Alabama. Economically there are some states that are losing a great deal of tax revenue because certain businesses that are out-of-state are not required to collect sales-tax. According to William T. Lundeen and Tracy D. Williams (2002), “Congress cannot alter the protections provided by the Due Process Clause” (p. 18). Therefore, the Supreme Court ruled on this issue in 1992, saying that out-of-state tax collectors cannot force retailers to pay taxes.

On Tuesday, November 6, 2012 one of the most crucial presidential elections will take place in our history. The candidates for this upcoming election are as follows: democrat party, current President Barack Obama (president) and Joe Biden (vice); republican party, Mitt Romney (president) and Paul Ryan (vice president); independent/ 3rd party candidates are Virgil Goode, Gary Johnson, and Jill Stein. As the final hours of the most anticipated election approaches, it is important that one is knowledgeable regarding both parties and their intentions for America, if elected for president.

Caterpillar, Inc. just like other corporations have a legal obligation to establish ground rules and to abide by the law under which businesses are expected to operate. There is a codified ethics that businesses must abide by and those code of conducts includes responsibilities to abide by the rule of conducts in their financial reporting. This is especially important for the accountants of businesses because accounting professionals most likely are subject to the AICPA code of professional conduct that involves rules and policies in professionalism and ethics. In recent similar cases of tax evasion, the Internal Revenue Service (IRS) and the Department of Justice (DOJ) has taken enforcement action in the offshore tax avoidance issues. The

This case launched when the Department of Revenue notified American Business USA Corporation they would be conducting an audit of the accounts and records. After completion of the audit the Department of Revenue issued a proposed tax assessment pursuant to section 212.05 91) (l) of the Florida Statute against American Business USA Corporation for taxes and interest of internet sales transactions.

Taxes policy is one of strategies that states have to increase their competitiveness. From 51 states nation-wide, only five states that do not impose sales tax or 0% sales tax rate. They are Alaska, Delaware, Montana, New Hampshire and Oregon. Without sales tax, in this five states, people can buy everything without spending extra dollar for tax, which mean they will have extra ‘money’ for saving or spending to other goods compared to other states because some of states impose both income and sales tax.

Andreoni, J., Erard, B., & Feinstein, J. (1998). Tax compliance. Journal of economic literature, 36(2), 818-860.

which they were incurred. During the carry-over period, the net capital losses can be deducted

The state government believes it’s futile to expect people to be honest and pay the tax. States cannot legally require out-of-state retailers to act as their tax collectors. But state government tries to pressure them anyway, if they are successful, the unpaid taxes could bring in over $11

Sales tax is one of the most conversed topics and in the national spotlight frequently. States have been struggling to gain a hold on internet sales and the related tax liabilities. Sales tax policy is an intriguing subject and the current internet revolution is pushing discussion of sales taxes to the forefront. This has caused a high level of distress held by business leaders, bureaucrats, and politicians in the field of sales tax. The current goal and focus on sales tax policy is that a more rational sales tax compliance environment can be developed.