Final answer:
The statement is false; so corporations, notably those with gross receipts over $25 million, are required to use the accrual method of accounting for tax purposes. They must pay varying rates of corporate taxes and are subject to other types of taxes just like other taxpayers.
Step-by-step explanation:
The statement that all corporations may choose to use either the cash or accrual method of accounting for tax is false. While small businesses might have the option to choose between these methods, corporations that have a certain level of gross receipts, usually more than $25 million, are generally required to use the accrual method for tax purposes. However, there are exceptions to this general rule, such as for certain types of businesses and situations as specified by the Internal Revenue Service (IRS). Corporations compute their net taxable income based largely on their financial statement income. They are subject to varying corporate tax rates, which depend on the jurisdiction. The effective tax rate is a reflection of the average tax rate paid by a corporation, which accounts for any tax benefits they might receive during the current tax year.
In addition to federal income tax, corporations face other taxes like property tax, payroll tax, excise tax, and customs tax, similar to other types of taxpayers. These taxes are imposed by different levels of government and, while strategies can be implemented to manage tax liabilities, outright avoidance of these taxes using technologies or other methods could potentially lead to legal repercussions.