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68 Harv. L. Rev. 257 (1954-1955)
The Internal Revenue Code of 1954: Tax Accounting

handle is hein.journals/hlr68 and id is 307 raw text is: THE INTERNAL REVENUE CODE OF 1954: TAX ACCOUNTING Maurice Austin,* Stanley S. Surrey,** William C. Warren,t and Robert M. Winokur tt T HE principal function of time as a dimension in income taxa- tion is the placing of income and deductions in neatly com- partmented segments - usually years - for which income and consequent tax liability can be determined. This process requires, in all but the simplest cases, resort to estimates and to expedients and techniques which project income and deduction items forward and backward in time to future and past taxable periods in the effort to reflect each period's income clearly. The shifts in the time dimension are also materially affected by such provisions as the two-year carryback and five-year carryover of net oper- ating losses.' The Internal Revenue Code of 1954 provides new vehicles for backward and forward time travel in taxation. It is proposed herein to examine these provisions with respect to the needs they were designed to meet, their objectives, and their achievements. I. BACKGROUND -AND THE PURPOSE OF THE 1954 CODE REVISION One of the principal functions of accounting principles and procedures is the determination of business income. This in- volves problems of distinction between income and capital; deter- *Member of the New York Bar. M.B.A., City College of New York, 1925; LL.B., Brooklyn Law School, 1937. ** Professor of Law, Harvard Law School. B.S., City College of New York, 1929; LL.B., Columbia, 1932. t Dean and Professor of Law, Columbia Law School. A.B., Texas, 193o, A.M., 1932; LL.B., Harvard, 1935. t Member of the New York Bar. B.S.S., City College of New York, 1947; LL.B., Columbia, 1949. IINT. RPv. CODE OF 1954, § 172(b) ; Int. Rev. Code of 1939, § i22(b). Sections of the 1954 Code are hereinafter referred to simply by section number; sections of the 1939 Code, 53 STAT. I, as it read immediately prior to its repeal, are cited by old section number.

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