Abstract The article comments on the paper "Misleading Tax Figures--A Problem for Accountants," by Richard P. Weber. The paper is based on the topic of the allowable methods of allocating a consolidated return tax liability among the various members of an affiliated group pursuant to Section 1552 of the U.S. Internal Revenue Code and Reg. 1.1502-33(d)(2). It presents a numerical example which illustrates the nine possible allocations of the consolidated tax liability considering these statutory provisions. The author disagrees with the paper's conclusion that when members of an affiliated group publish separate financial statements and use a different method of allocating the consolidated tax liability for financial reporting purposes than for tax purposes, the resulting tax liability as reported on the financial statements may be misleading. Apparently, the basis of Weber's conclusion is that the allocated tax liability is different from what the tax would have been if the individual company had not been a member of an affiliated group.
Robert Halperin (Sat,) studied this question.
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