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Why Does the Federal Tax Law Disallow a Business Deduction

Question 54

Multiple Choice

Why does the federal tax law disallow a business deduction for political contributions?


A) A deduction for the payment of a political contribution would be a subsidy for bad behavior.
B) A deduction for the payment of a political contribution would subsidize partisan political activities.
C) The payment of a political contribution is not an expense for financial reporting purposes.
D) A deduction for the payment of a fine or penalty would distort the measurement of taxable income.

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