1. Managers are often concerned about the impact on reported profits of any actions recommended by the tax-planning department. Explain why. 2. How might tax savings be sacrificed to achieve...

1. Managers are often concerned about the impact on reported profits of any actions recommended by the tax-planning department. Explain why.

2. How might tax savings be sacrificed to achieve organizational design efficiencies or to mitigate political costs?

3. On the next page is an extract from Cisco Systems’ 2012 Annual Report. What is the firm’s GAAP effective tax rate? Why does it differ from the top statutory tax rate? What are deferred taxes? What are the major deferred tax items for Cisco? What is the amount of unrecognized tax benefits that Cisco has as of the year ended July 28, 2012?

4. What are the tax benefits of deferring income recognition in advance of a decline in statutory tax rates? What, if any, are the nontax costs?