,ACCESS Test Bank for South Western Federal Taxation 2023 Corporations
Partnerships Estates and Trusts 46th Edition Raabe
Instructor’s Guide: Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia, SWFT 2023 Volume 2: Corporations, Partnerships,
Estates & Trusts, 9780357719961; Chapter 1: Understanding and Working with the Federal Tax Law
Instructor’s Guide
Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia, SWFT 2023 Volume 2: Corporations,
Partnerships, Estates & Trusts, 9780357719961; Chapter 1: Understanding and Working with the
Federal Tax Law
Table of Contents
Chapter Objectives ..................................................................................................................... 2
Chapter Outline .......................................................................................................................... 2
Discussion Questions................................................................................................................ 16
Video Information ...................................................................................................................... 18
Related Cengage Video Content .............................................................................................................. 18
© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 1
website, in whole or in part.
mynursytest.store
,ACCESS Test Bank for South Western Federal Taxation 2023 Corporations
Partnerships Estates and Trusts 46th Edition Raabe
Instructor’s Guide: Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia, SWFT 2023 Volume 2: Corporations, Partnerships,
Estates & Trusts, 9780357719961; Chapter 1: Understanding and Working with the Federal Tax Law
Chapter Objectives
The following objectives are addressed in this chapter:
1.1 Discuss the importance of revenue needs as an objective of Federal tax law.
1.2 Demonstrate the influence of economic, social, equity, and political considerations
on the development of the tax law.
1.3 Explain how the IRS, as the protector of the revenue, has affected tax law.
1.4 Recognize the role of the courts in interpreting and shaping tax law.
1.5 Identify tax law sources—statutory, administrative, and judicial.
1.6 List and assess tax law sources.
1.7 Demonstrate the ability to conduct tax research.
1.8 Assess the validity and weight of tax law sources.
1.9 Describe various tax planning procedures.
1.10 Explain the role of taxation on the CPA examination.
[return to top]
Chapter Outline
In the outline below, each element includes references (in parentheses) to related content. “CO
CH.##” refers to the chapter objective; “PPT Slide #” refers to the slide number in the PowerPoint
deck for this chapter (provided in the PowerPoints section of the Instructor Resource Center);
and, as applicable for each discipline, accreditation or certification standards (“BL 1.3.3”).
Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this
chapter. Review learning objectives for Chapter 1. (PPT Slides 2–3).
I. The Whys of the Tax Law
i.
While the primary objective of Federal tax law is raising revenue, this is
not the sole objective of tax laws.
1. Important in explaining various provisions found in the law are
economic, social, equity, and political considerations.
2. The Treasury Department, the IRS, and the courts also have
significant impacts on the evolution of Federal tax law.
a. Revenue Needs (1.1, PPT Slide 6)
i. Raising revenue to fund the cost of government operations is the key
factor in structuring a tax system.
ii. Over the past century, the national debt has been increasing
significantly, reaching more than $28.8 trillion, or about $86,000 per
citizen, in November 2021.
© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 2
website, in whole or in part.
mynursytest.store
, ACCESScTestcBankcforcSouthcWesterncFederalcTaxationc2023cCorporationscPar
tnershipscEstatescandcTrustsc46thcEditioncRaabe
Instructor’scGuide:c Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia,cSWFTc 2023c Volumec 2:c Corporations,c Partnerships,
Estatesc&cTrusts,c9780357719961;cChapterc1:cUnderstandingcandcWorkingcwithc thecFederalcTaxcLaw
iii. Whencenactingctaxclegislation,cCongressciscoftencguidedcbycthecconce
ptcofcrevenuecneutrality.
1. Changescincthectaxclawcshouldcneithercincreasecnorcdecreasecthecn
etcrevenuescreceivedcbycthecgovernment.
2. Therecareclikelyctocbecbothc“winners”c(taxpayerscwhocseecacreducti
oncinctaxescpaid)candc“losers”c(taxpayerscwhocseecancincreasecinct
axescpaid).
b. EconomiccConsiderationsc(1.2,cPPTcSlidesc7–16)
i. Taxclawciscoftencusedctocaccomplishceconomiccobjectives.
ii. ControlcofcthecEconomy.cCongresschascusedcthectaxcdepreciationcsyste
mcasconecmeanscofccontrollingcthececonomy.
1. Shortercassetclivescandcacceleratedcmethodscshouldcencourag
ecadditionalcinvestmentscincdepreciablecbusinesscproperty.
2. Longercassetclivescandcthecusecofcstraight-
linecdepreciationcshouldcdiscourageccapitalcoutlays.
3. Congresscalsocusescincentivesclikecimmediatecexpensingc(§c179)ca
ndcbonuscdepreciationctocstimulatecthececonomycwhencneeded.
4. Whenctaxcratescareclowered,ctaxpayerscretaincmoneycthatccanc
becusedcforcothercpurposes.
5. IfcCongressciscusingcthecconceptcofcrevenuecneutrality,cratecredu
ctionscmaycbecoffsetcbycacreductioncorceliminationcofcdeductions
corccredits.cAscacresult,clowercratescdocnotcalwayscmeanclowercta
xes.
iii. EncouragementcofcCertaincActivities.
1. Researchcandcdevelopmentcexpendituresccancbecdeductedcincth
ecyearcincurredcor,calternatively,ccapitalizedcandcamortizedcover
cacperiodcofc60cmonthscorcmore.cThesecexpenditurescalsocmayc
generatecactaxccredit.
2. Inventionsc(includingctechnologicalcinnovations)calsocarecencourage
dcunderctaxclaw.cPatentsccancqualifycasccapitalcassets,candcundercc
ertaincconditions,ctheircdispositioncautomaticallyccarriesclong-
termccapitalcgainctreatment.
3. Ecologyciscencouragedcbycallowingcpollutionccontrolcfacilitiesctoc
becamortizedcoverc60cmonthsc(rathercthancovercthec39-
yearcperiodcrequiredcforcmostcbusinesscbuildings).
4. Saving,cwhichcleadsctoccapitalcformation,ciscstimulatedcbycincentive
sctocincreasecprivatecretirementcplans.cThecencouragementcofcpriv
ate-
csectorcpensioncplansccancbecjustifiedcundercsocialcconsiderationsc
ascwell.
iv. EncouragementcofcCertaincIndustries.
1. Taxclawscfavorcfarmingcbycallowingcexpensingcofcsoilcandcwat
ercconservationcandcfertilizers.cAlso,cfarmersccancdefercthecg
© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 3
website, in whole or in part.
mynursytest.store
Partnerships Estates and Trusts 46th Edition Raabe
Instructor’s Guide: Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia, SWFT 2023 Volume 2: Corporations, Partnerships,
Estates & Trusts, 9780357719961; Chapter 1: Understanding and Working with the Federal Tax Law
Instructor’s Guide
Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia, SWFT 2023 Volume 2: Corporations,
Partnerships, Estates & Trusts, 9780357719961; Chapter 1: Understanding and Working with the
Federal Tax Law
Table of Contents
Chapter Objectives ..................................................................................................................... 2
Chapter Outline .......................................................................................................................... 2
Discussion Questions................................................................................................................ 16
Video Information ...................................................................................................................... 18
Related Cengage Video Content .............................................................................................................. 18
© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 1
website, in whole or in part.
mynursytest.store
,ACCESS Test Bank for South Western Federal Taxation 2023 Corporations
Partnerships Estates and Trusts 46th Edition Raabe
Instructor’s Guide: Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia, SWFT 2023 Volume 2: Corporations, Partnerships,
Estates & Trusts, 9780357719961; Chapter 1: Understanding and Working with the Federal Tax Law
Chapter Objectives
The following objectives are addressed in this chapter:
1.1 Discuss the importance of revenue needs as an objective of Federal tax law.
1.2 Demonstrate the influence of economic, social, equity, and political considerations
on the development of the tax law.
1.3 Explain how the IRS, as the protector of the revenue, has affected tax law.
1.4 Recognize the role of the courts in interpreting and shaping tax law.
1.5 Identify tax law sources—statutory, administrative, and judicial.
1.6 List and assess tax law sources.
1.7 Demonstrate the ability to conduct tax research.
1.8 Assess the validity and weight of tax law sources.
1.9 Describe various tax planning procedures.
1.10 Explain the role of taxation on the CPA examination.
[return to top]
Chapter Outline
In the outline below, each element includes references (in parentheses) to related content. “CO
CH.##” refers to the chapter objective; “PPT Slide #” refers to the slide number in the PowerPoint
deck for this chapter (provided in the PowerPoints section of the Instructor Resource Center);
and, as applicable for each discipline, accreditation or certification standards (“BL 1.3.3”).
Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this
chapter. Review learning objectives for Chapter 1. (PPT Slides 2–3).
I. The Whys of the Tax Law
i.
While the primary objective of Federal tax law is raising revenue, this is
not the sole objective of tax laws.
1. Important in explaining various provisions found in the law are
economic, social, equity, and political considerations.
2. The Treasury Department, the IRS, and the courts also have
significant impacts on the evolution of Federal tax law.
a. Revenue Needs (1.1, PPT Slide 6)
i. Raising revenue to fund the cost of government operations is the key
factor in structuring a tax system.
ii. Over the past century, the national debt has been increasing
significantly, reaching more than $28.8 trillion, or about $86,000 per
citizen, in November 2021.
© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 2
website, in whole or in part.
mynursytest.store
, ACCESScTestcBankcforcSouthcWesterncFederalcTaxationc2023cCorporationscPar
tnershipscEstatescandcTrustsc46thcEditioncRaabe
Instructor’scGuide:c Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia,cSWFTc 2023c Volumec 2:c Corporations,c Partnerships,
Estatesc&cTrusts,c9780357719961;cChapterc1:cUnderstandingcandcWorkingcwithc thecFederalcTaxcLaw
iii. Whencenactingctaxclegislation,cCongressciscoftencguidedcbycthecconce
ptcofcrevenuecneutrality.
1. Changescincthectaxclawcshouldcneithercincreasecnorcdecreasecthecn
etcrevenuescreceivedcbycthecgovernment.
2. Therecareclikelyctocbecbothc“winners”c(taxpayerscwhocseecacreducti
oncinctaxescpaid)candc“losers”c(taxpayerscwhocseecancincreasecinct
axescpaid).
b. EconomiccConsiderationsc(1.2,cPPTcSlidesc7–16)
i. Taxclawciscoftencusedctocaccomplishceconomiccobjectives.
ii. ControlcofcthecEconomy.cCongresschascusedcthectaxcdepreciationcsyste
mcasconecmeanscofccontrollingcthececonomy.
1. Shortercassetclivescandcacceleratedcmethodscshouldcencourag
ecadditionalcinvestmentscincdepreciablecbusinesscproperty.
2. Longercassetclivescandcthecusecofcstraight-
linecdepreciationcshouldcdiscourageccapitalcoutlays.
3. Congresscalsocusescincentivesclikecimmediatecexpensingc(§c179)ca
ndcbonuscdepreciationctocstimulatecthececonomycwhencneeded.
4. Whenctaxcratescareclowered,ctaxpayerscretaincmoneycthatccanc
becusedcforcothercpurposes.
5. IfcCongressciscusingcthecconceptcofcrevenuecneutrality,cratecredu
ctionscmaycbecoffsetcbycacreductioncorceliminationcofcdeductions
corccredits.cAscacresult,clowercratescdocnotcalwayscmeanclowercta
xes.
iii. EncouragementcofcCertaincActivities.
1. Researchcandcdevelopmentcexpendituresccancbecdeductedcincth
ecyearcincurredcor,calternatively,ccapitalizedcandcamortizedcover
cacperiodcofc60cmonthscorcmore.cThesecexpenditurescalsocmayc
generatecactaxccredit.
2. Inventionsc(includingctechnologicalcinnovations)calsocarecencourage
dcunderctaxclaw.cPatentsccancqualifycasccapitalcassets,candcundercc
ertaincconditions,ctheircdispositioncautomaticallyccarriesclong-
termccapitalcgainctreatment.
3. Ecologyciscencouragedcbycallowingcpollutionccontrolcfacilitiesctoc
becamortizedcoverc60cmonthsc(rathercthancovercthec39-
yearcperiodcrequiredcforcmostcbusinesscbuildings).
4. Saving,cwhichcleadsctoccapitalcformation,ciscstimulatedcbycincentive
sctocincreasecprivatecretirementcplans.cThecencouragementcofcpriv
ate-
csectorcpensioncplansccancbecjustifiedcundercsocialcconsiderationsc
ascwell.
iv. EncouragementcofcCertaincIndustries.
1. Taxclawscfavorcfarmingcbycallowingcexpensingcofcsoilcandcwat
ercconservationcandcfertilizers.cAlso,cfarmersccancdefercthecg
© 2023 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 3
website, in whole or in part.
mynursytest.store
