Corporate Tax Case: Tax Provision to Return Cycle

• In Event: Teaching Cases and Pedagogy

Abstract

This case presents a complex semester project designed to give students experience in preparation of a corporate tax provision and to acquaint them with the annual corporate tax cycle. It is needed for three reasons. First, since new hires normally have not received substantial training regarding tax provision preparation, firms normally must provide in-house training for this important area of tax practice. Second, students normally will not have tied together the sequence of events comprising the annual corporate tax cycle; whereas they have learned various details about tax return preparation, they normally have not appreciated the relationship that individual parts have to the greater whole. Third, students frequently learn corporate taxation as a distinct discipline apart from financial accounting and may not adequately appreciate the impact that corporate tax calculations have on the financial statements. This case is intended to address these needs by presenting students with a realistic corporate accounting fact pattern and asking them to complete a series of deliverables that depict the annual tax cycle.

In order to complete this project, students must rely on knowledge learned during the semester course in corporate taxation as well as their financial accounting courses and are required to use their analytical and critical thinking skills. Students are asked to complete three deliverables: (1) a corporate tax provision, (2) a completed corporate tax return; and (3) a return-to-provision adjustment. As a result of this assignment, students learn about the corporate tax cycle from year-end closing to completion of the filed corporate tax return and adjustments, in addition to learning more about book-to-tax adjustments and their impact on corporate financial statements.

Author

• Monique O Durant, Central Connecticut State University