Rainbow Tax Service, Inc. - Page 9

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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                     

               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                  

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Last modified: May 25, 2011