ACC 522 Chapter Notes - Chapter 2: Fide, Financial Transaction, Snapple
Document Summary
Acc 522 chapter 2 notes: fundamentals of tax planning. Improving cash flow by means of tax planning involves taking actions that result in a reduction, elimination, or change in the timing of tax. Tax planning is the legitimate arranging of one"s financial activities in a manner that reduces or defers the related tax cost: within the object and spirit of the law. The income tax act includes the general anti-avoidance rule (gaar), which attempts to indicate what is not legitimate tax planning. A taxpayer is given the choice of deducting or not deducting a reserve for bad debts in any particular year. Can also deduct the reserve in another year. Tax evasion the commission or omission of an act with the intent to deceive. Includes knowingly failing to report revenue or claiming a deduction of a false expense. Also, knowingly omitting material facts from tax records. Often, difficult to distinguish between legitimate tax planning and abusive tax avoidance.
