Engineering In Corporate Tax Determination

While it is true that taxes, especially income taxes, whether they be federal, state, or local, are not usually thought of as a "cost" of doing business, it is equally true that these tax costs do reduce the distributable profits just as much as the cost of power, supplies, or labor. Therefore, the consideration given to taxes is often as important as that given to other costs. Hopefully you will recognize that, within certain limits, taxes can be controlled to an economic advantage. The tax laws as now imposed are quite complex. Many of these laws and the regulations thereunder involve many factual determinations, technical considerations, and specialized valuations that can best be made by people trained in the specific area concerned. A substantial amount of a tax liability turns on the proper consideration given to issues involving facts and principles which are peculiarly engineering in nature. The importance of these "engineering" issues in tax administration has been significantly increased in recent years by our rapidly advancing technology, automation, stepped-up mineral and oil exploitation, new industries such as electronics and nuclear power, and the extension of percentage depletion to all minerals. These specialized requirements incorporated in the law are so technical that full consideration can not be given by people with a non-engineering background.