In recent years there has been some discussion among lawmakers, the Securities and Exchange Commission, and those in the accounting profession as to whether U.S. generally accepted accounting principles should move more toward "principles-based’" accounting. In fact, the Sarbanes-Oxley Act required a study of a move to principles-based accounting, and on July 25, 2003, the SEC's Office of the Chief Accountant and its Office of Economic Analysis issued a report recommending that the U.S. accounting system move to an "objectives-oriented" system, which includes principles-based standards. I must say a move to principles-based accounting sounds like a good idea to me. In any area, including both accounting and income taxation, it is important to focus first on certain core principles in order that everything might be put in perspective, and in order that one might be able to figure out answers to issues for which no specific rules have been provided. In order to move the debate along, I offer here some suggested core principles for accounting, principles which I believe should also be applied in the area of income taxation. With respect to the income tax, Albert Einstein is reputed to have said, "The income tax is the hardest thing in the world to understand" (and he probably would have said U.S. GAAP comes in a close second). Of the Internal Revenue Code, Judge Learned Hand once wrote: In my own case the words of such an act as the Income Tax, for example, merely dance before my eyes in a meaningless procession ... couched in abstract terms that offer no handle to seize hold of. ... [At times I cannot help recalling a saying of William James about certain passages of Hegel: that they were no doubt written with a passion of rationality; but that one cannot help wondering whether to the reader they have significance save that the words are strung together with syntactical correctness."