Yes! There are some items that legitimately give rise to permanent differences between a company’s financial reporting income and its IRS income tax reporting income. These differences are not due to a company cheating on its taxes. Instead, these are due to policy decisions by the US federal government to incentivize certain behaviors by corporations.
| Accounting Books | Income Taxes | |
| Municipal bond interest income | Included | Excluded |
| State bond interest income | Included | Excluded |
| Fines & penalties | Deductible from income | Not deductible from income |
| Entertainment expense | Deductible | Not deductible |
| Meal expenses | 100% deductible | 50% deductible |
| Life insurance premiums | Deductible | Not deductible |
| Dividends received | Deductible | Not deductible |