Final answer:
Obtaining a tax benefit by shifting itemized deductions from one year to another is sometimes allowed and is known as tax planning. Tax planning is a legitimate strategy used by individuals and businesses to reduce their tax liability legally.
Step-by-step explanation:
The statement is False. Obtaining a tax benefit by shifting itemized deductions from one year to another is sometimes allowed and is known as tax planning. Tax planning is a legitimate strategy used by individuals and businesses to reduce their tax liability legally. It involves carefully timing certain deductions or income to optimize tax savings.
For example, if an individual knows that they will have higher income and tax liability in one year but lower income in the following year, they may choose to shift certain deductions, such as charitable contributions or medical expenses, from the higher-income year to the lower-income year. This can help reduce their overall tax liability.
However, it's important to note that there are rules and limitations set by the tax authorities regarding the timing and amount of deductions that can be shifted. Taxpayers should consult with a qualified tax professional or refer to the tax code to ensure compliance with the applicable regulations.