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transactions within “annual accounting periods”. Sec. 441(c).
Tax professionals and the Internal Revenue Code itself generally
regard the process of determining in which annual accounting
period revenues and expenditures are to be recognized as tax
accounting. See generally secs. 441 through 483.
A significant aspect of petitioner’s tax return preparation
services consists of assisting clients in properly recognizing
and reporting revenue and expenditures in the appropriate tax
year or, in other words, performing tax accounting services.
We conclude that petitioner’s tax return preparation
services, for purposes of section 448(d)(2), constitute services
within the field of accounting.
Bookkeeping, which section 448 and the regulations
thereunder do not address, has been defined elsewhere as:
a branch of accounting that deals with the
systematic classification, recording, and
summarizing of business and financial
transactions in books of account. * * *
[Webster’s Third New International Dictionary
(1981).]
Not only does bookkeeping constitute a “branch” of
accounting, but our system of double entry bookkeeping undergirds
modern financial accounting.3
3 Historians generally consider Luca Pacioli (1445-1514 or
1517) to be “The Father of Accounting” for first documenting in
his work Summa de Arithmetica, Geometria, Proportioni et
Proportionalita (Venice 1494), the process of double entry
bookkeeping.
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Last modified: May 25, 2011