Free CPA Exam Deep Dive: Tax Agency Funds

Master Tricky CPA Topics with Deep Dive Videos In the first of what will be a regular feature here on our blog, we’re giving you access to one of Wiley CPAexcel’s  60+ Deep Dive Videos .

In this Deep Dive, Prof. Donald Deis of Texas A&M University – Corpus Christi expands on Tax Agency Funds, which are covered in the Fiduciary Funds section of Wiley CPAexcel.

Preparing for the FAR section? Then you need to watch this.

Tax Agency Fund Overview

A Tax Agency Fund (TAF) is used to account for all taxes a government is responsible to collect, both its own taxes and taxes for other governments (e.g. a county government collecting taxes on behalf of a city government). It’s used to combine tax levies from multiple governments in same geographic area and avoid duplicating assessment and collection processes.

However, only taxes receivable held for other governments are reported in the TAF’s GAAP-based financial statements.

How A Tax Agency Fund Works

  1. Governments (e.g. county and city) continue to maintain their own tax records.
  2. Assessments are turned over to TAF for collection.
  3. TAF sends out bills to taxpayers.
  4. Collections are made by TAF.
  5. Collections distributed to participating governments, less a collection fee that goes to government administering the TA

Check out Prof. Deis’s video for a quick explanation of TAFs and how they’re handled in financial statements.

Want More?

Wiley CPAexcel users get an even deeper look at Tax Agency Funds — and Fiduciary Funds in general — with accompanying handouts and slides for each video lecture and Deep Dive, as well as proficiency questions to gauge their understanding of these complex topics.

Fiduciary Funds will also be covered in great detail during our Virtual Classroom series (included with our Platinum CPA Review Course ) – the next FAR module starts on April 21.

We hope you enjoy this free Deep Dive Video. Let us know what you think!

You may also like: