Soon after Congress last year passed a new revenue code, the law sprang some big, unexpected leaks. Two of the biggest, originally designed to make tax rules conform to business accounting practices, were:
¶A section allowing companies to set up a reserve fund to meet future expenses without paying taxes on the reserve until the following year. Example: a manufacturer who sold a television set in 1954 for $329 and estimated that he would have to spend $16 to service it in 1955 was allowed to report only $313 as 1954 income..He would not pay taxes on the rest until the end...
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