The Story of Schlude: The Origins of the Tax/Financial Accounting GA(A)P
Russell K. Osgood
TAX STORIES: AN IN-DEPTH LOOK AT TEN LEADING FEDERAL INCOME TAX CASES, Foundation Press, Forthcoming
This paper presents the story of Schlude v. Commissioner, 372 U.S. 128 (1963), the third in a trilogy of cases that established emphatically that tax accounting under the Internal Revenue Code may differ from generally accepted accounting principles ("GAAP"). Drawing upon the parties' briefs and oral arguments before the U.S. Supreme Court, judicial opinions in other cases, and recent scholarly commentary, it describes what was really involved in the case, the government's and taxpayer's litigation strategies, the decision-making processes of the courts, and the case's impact on the development of the tax law. Indeed, with reports of accounting scofflaws like Enron, Global Crossing, Tyco International, WorldCom, and Xerox dominating national attention in recent weeks, this is a particularly propitious time to re-examine the Schlude trilogy's sanctioning of departures in tax accounting from GAAP. The paper will be published as a chapter in a book to be entitled Tax Stories: An In-Depth Look at Ten Leading Federal Income Tax Cases (Foundation Press, forthcoming 2002). Additional financial support for the project has been provided by the American Tax Policy Institute.
The paper will be published as a chapter in a book to be entitled Tax Stories: An In-Depth Look at Ten Leading Federal Income Tax Cases (Foundation Press). Additional financial support for the project has been provided by the American Tax Policy Institute.
Date posted: July 31, 2002
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