Stuart Corporation's taxable income differed from its accounting income computed for this past year. An item that would create a permanent difference in accounting and taxable incomes for Stuart would be

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Permanent differences between taxable income and accounting income arise from items that are included in accounting income but never in taxable income, or vice versa. Fines resulting from violations of OSHA regulations are not deductible for tax purposes, creating a permanent difference between taxable and accounting incomes.

Stuart Corporation's Taxable Income Differed from Its Accounting Income Computed