Which of the following statements is INCORRECT regarding tax planning? Multiple choice question. Tax planning is important because taxes are the primary determinant of how a transaction is structured. The government is involved in most all transactions between two parties and is sometimes referred to as "the uninvited silent party." Good tax planning requires understanding the tax and nontax costs from the taxpayer's and the other party's perspective. Tax planning requires understanding that almost every financial transaction includes the taxpayer, the other transacting party, and the government