Solution Manual for CCH Federal Taxation 2021 Comprehensive Topics, 1st Edition by W. Brian Dowis, 9780808054054, Covering Chapters 1-. Includes Rationales

FederalTaxResearch (
g g g




th
12 Edition)
g




RobySawyers, Steven
g g g




Gill

Study Guide g




2021

,FederalgTaxgResearch,g11thgEdition Pageg1-1

CHAPTER 1 g


AN INTRODUCTION TO TAX PRACTICE AND ETHICS
g g g g g g




DISCUSSIONgQUESTIONS

1-1.
IngthegUnitedgStates,gthegtaxgsystemgisgangoutgrowthgofgthegfollowinggfivegdisciplines:gla
w,gaccounting,geconomics,gpoliticalgscience,gandgsociology.gThegenvironmentgforgthegtaxgsyste
mgisgprovidedgbygthegprinciplesgofgeconomics,gsociology,gandgpoliticalgscience,gwhilegtheglegalg
andgaccountinggfieldsgaregresponsiblegforgthegsystem'sginterpretationgandgapplication.

Eachgofgthesegdisciplinesgaffectsgthisgcountry'sgtaxgsystemgingaguniquegway.gEconomistsgaddressgsu
chgissuesgasghowgproposedgtaxglegislationgwillgaffectgthegrategofginflationgorgeconomicggrowth.gMea
surementgofgthegsocialgequitygofgagtax,gandgdetermininggwhethergagtaxgsystemgdiscriminatesgagainst
gcertaingtaxpayers,garegissuesgthatgaregexaminedgbygsociologistsgandgpoliticalgscientists.gFinally,gatt

orneysgaregresponsiblegforgtheginterpretationgofgthegtaxationgstatutes,gandgaccountantsgensuregthatgt
hesegsamegstatutesgaregappliedgconsistently.

Pageg4

1-2. Thegothergmajorgcategoriesgofgtaxgpracticegingadditiongtogtaxgresearchgare:

• taxgcompliance
• taxgplanning
• taxglitigation

gPageg5

1-3.
Taxgcompliancegconsistsgofggatheringgpertinentginformation,gevaluatinggandgclassifyinggtha
tginformation,gandgfilingganygnecessarygtaxgreturns.gCompliancegalsogincludesgothergfunctionsgnece
ssarygtogsatisfyggovernmentalgrequirements,gsuchgasgrepresentinggagclientgduringgangIRSgaudit.

Pageg5

1-4.
Mostgofgthegtaxgcompliancegworkgisgperformedgbygcommercialgtaxgpreparers,genrolledgag
ents,gattorneys,gandgCPAs.gNoncomplexgindividual,gpartnership,gandgcorporategtaxgreturnsgoften
garegcompletedgbygcommercial gtaxgpreparers.gThegpreparationgofgmoregcomplexgreturnsgusuallyg

isgperformedgbygenrolledgagents,gattorneys,gandgCPAs.gTheglatterggroupsgalsogprovidegtaxgplanni
nggservicesgandgrepresentgtheirgclientsgbeforegthegIRS.

AngenrolledgagentgisgonegwhogisgadmittedgtogpracticegbeforegthegIRSgbygpassinggagspecialgIRS-
gadministeredgexamination,gorgwhoghasgworkedgforgthegIRSgforgfivegyears,gandgisgissuedgagpermitgto

grepresentgclientsgbeforegthegIRS.gCPAsgandgattorneysgaregnotgrequiredgtogtakegthisgexaminationgan

dgaregautomaticallygadmittedgtogpracticegbeforegthegIRSgifgtheygareginggoodgstandinggwithgthegappr
opriategprofessionalglicensinggboard.

Pageg5gandgCircularg230

,Pageg1-2 SOLUTIONSgMANUAL

1-5.
Taxgplanninggisgthegprocessgofgarranginggone'sgfinancialgaffairsgtogminimizeganygtaxgliability
.gMuchgofgmoderngtaxgpracticegcentersgaroundgthisgprocess,gandgthegresultinggoutcomegisgtaxgavoid
ance.
Theregisgnothinggillegalgorgimmoralgingthegavoidancegofgtaxation,gasglonggasgthegtaxpayergremainsgw
ithinglegalgbounds.gIngcontrast,gtaxgevasiongconstitutesgthegillegalgnonpaymentgofgagtaxgandgcannotgb
egcondoned.gActivitiesgofgthisgsortgclearlygviolategexistingglegalgconstraintsgandgfallgoutsidegofgthegd
omaingofgthegprofessionalgtaxgpractitioner.

Pageg6

1-6.
Ingangopengtaxgplanninggsituation,gthegtransactiongisgnotgyetgcomplete,gtherefore,gthegtaxgprac
titionergmaintainsgsomegdegreegofgcontrolgovergthegpotentialgtaxgliability,gandgthegtransactiongmaygb
egmodi-
gfiedgtogachieve gagmoregfavorablegtaxgtreatment.gIngagclosedgtransactionghowever,gallgofgthegpertinent

gactionsghavegbeengcompleted,gandgtaxgplanninggactivitiesgmaygbeglimitedgtogthegpresentationgofgtheg

situationgtogtheggovernmentgingthegmostglegallygadvantageousgmannergpossible.

Pageg6

1-7.
TaxglitigationgisgthegprocessgofgsettlinggagdisputegwithgthegIRSgingagcourtgofglaw.gTypicall
y,gagtaxgattorneyghandlesgtaxglitigationgthatgprogressesgbeyondgthegfinalgIRSgappeal.

Pageg6

1-8. CPAsgservegisgagsupportgcapacitygingtaxglitigation.

Pageg6

1-9.
Taxgresearchgconsistsgofgthegresolutiongofgunansweredgtaxationgquestions.gThegtaxgresearchg
processgincludesgthegfollowing:

1. Identificationgofgpertinentgissues;
2. Specificationgofgpropergauthorities;
3. Evaluationgofgthegproprietygofgauthorities;gand,
4. Applicationgofgauthoritiesgtogagspecificgsituation.

Pageg6

1-10.

Circularg230gisgissuedgbygthegTreasurygDepartmentgandgappliesgtogallgwhogpracticegbeforegt

hegIRS.gPageg7

1-11.
IngadditiongtogCircularg230,gCPAsgmustgfollowgthegAICPA'sgCodegofgProfessionalgCondu
ctgandgStatementsgongStandardsgforgTaxgServices.gCPAsgmustgalsogabidegbygthegrulesgofgthegappr
opriategstategboard(s)gofgaccountancy.

Pageg7

1-12. Agreturngpreparergmustgobtaing18ghoursgofgcontinuinggeducationgfromgangIRS-
approvedgCEgProvider.gTheghoursgmustgincludegag6gcreditghourgAnnualgFederalgTaxgRefreshergcou
rseg(AFTR)gthatgcoversgfilinggseasongissuesgandgtaxglawgupdates.gThegAFTRgcoursegmustgincludegag
knowledge-

, FederalgTaxgResearch,g11thgEdition Pageg1-3
gbasedgcomprehensiongtestgadministeredgatgthegconclusiongofgthegcoursegbygthegCEgProvider.

Limitedgpracticegrightsgallowgindividualsgtogrepresentgclientsgwhosegreturnsgtheygpreparedgandgs
igned,gbutgonlygbeforegrevenuegagents,gcustomergservicegrepresentatives,gandgsimilargIRSgempl
oyees.