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How To Build A Bridge: Eliminating The Book-Tax Accounting Gap, Celia Bigoness

Celia Bigoness

This article argues that the asserted benefits of the book-tax divide no longer justify its substantial costs in terms of tax compliance, revenue collection, economic policy, and the perceived unfairness of the U.S. income tax laws. The book-tax divide in particular opens an enormous gap within which corporations seeking to reduce tax liabilities can shelter reported financial income. This article considers that neither the tax system’s primary goal of raising revenue nor the financial accounting system’s primary goal of providing investor information would be compromised under a system of near-total accounting conformity.