Which type of accounting is specifically concerned with recording transactions for tax purposes?

Tax accounting is specifically focused on the preparation and filing of tax returns as well as the planning for future tax obligations. This branch of accounting adheres to the tax laws and regulations set forth by governing authorities, ensuring that individuals and businesses meet their tax responsibilities accurately and on time.

Tax accounting involves understanding the intricacies of tax codes and implementing strategies to minimize tax liabilities while ensuring compliance. It records transactions in a manner that reflects the requirements of tax authorities, which may differ from general financial accounting practices. For instance, certain expenses might be treated differently for tax reporting compared to standard financial statements.

Financial accounting, on the other hand, aims to provide a clear picture of a company's financial performance to external stakeholders, while managerial accounting is internal-focused, helping management make informed business decisions. Cost accounting deals with the analysis of cost components of producing goods or services, primarily used for internal decision making and not specifically for tax purposes. Thus, tax accounting is distinct in its primary objective of aligning financial activities with tax legislation.