How does GAAP accounting differ from tax accounting?

• GAAP reports to investors on accrual rules; tax follows IRS rules, and the gaps create deferred taxes
• Tax accounting follows accrual rules while GAAP reports on a cash basis, which is why their timing differs
• GAAP figures are prepared purely to file the corporate tax return, not to inform outside investors
• The two must reconcile to the same taxable income, so a company keeps only one set of books for both
• Both use identical depreciation and recognition rules, so the two never produce any difference in reported income