What would be the entry for this scenario:

Company has excess tax reserve for 17 million, they should have released the entire amount excess accrual to income statement. But instead, they only released 5 million and the rest went to an account on balance sheet.

I want to know what the journal entries would be if they did what they are suppose to and what they actually did.

I am not even sure is the tax reserve account the same as allowance for doubtful account? Or was it something else?

An allowance for doubtful accounts is an estimate of accounts receivable that will not be paid by customers. A tax reserve account has to do with taxes the company may owe the Internal Revenue Service. When a company files its tax returns it often pays less than the IRS (or the courts if it ends up there) might require were they to audit the company. This happens because companies will have items that are subjective which they have to evaluate and place a value on, and the IRS may not agree with their valuation.

The items in question could be a number of different things, including exclusions, deductions, credits, valuations, and timing differences. Because of the uncertainty related to their valuations and whether the IRS will accept them, the company has to estimate the amount of tax expense and tax liability to record. If the government is likely to prevail in a disagreement about the tax return, the company must account for it through the reserve.

Maybe another way to think of it is that the company has been aggressive in its filing of the tax return (in other words, reported less taxable income than might be accepted in order to lower its taxes), but it has to be more conservative (reflect its best estimate of what will likely be accepted) on its financial statement. So, a company pays lower taxes now due to tax positions claimed; the company might have to pay more tax someday as a result of tax enforcement; the company must reserve for those possible taxes on their financial statement, thereby lowering their net income.

What the company was "supposed to do" by the terms of your question was lower their liabilities by the $17 million and increase their net income by $17 million. What they did was lower their liability by $5 million and increase their net income by $5 million. You don't say where the rest of the amount of reserve "went to on the BS", so it could have remained as a liability or have been an adjustment to Retained Earnings. The rules regarding Tax Reserves have been changing in recent years, requiring companies to reserve for more than they had in the past. Often, entries to equity accounts are involved. It's difficult to tell you exact accounts without knowing their chart of accounts or knowing what they recorded in the past.