Research Case Solutions - Sawyers & Gill, Federal Tax Research 13th Edition, Verified Chapters 1 - 13, Complete Newest Version

Federal Tax Research, 13th Edition
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Solution Manual Federal Tax Research

13th Edition by Roby Sawyers, Steven Gill




Cha

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13

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CHAPTER 1 jo




INTRODUCTION TO TAX PRACTICE AND ETHICS jo jo jo jo jo




DISCUSSION QUESTIONS
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1-1.

In the United States, the tax system is an outgrowth of the following five disciplin
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es: law, accounting, economics, political science, and sociology. The environment for th
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e tax system isprovided by the principles of economics, sociology, and political science,
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while the legal and accounting fields are responsible for the system‘s interpretation and
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application.




Each of these disciplines affects this country‘s tax system in a unique way. Economists ad
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dresssuch issues as how proposed tax legislation will affect the rate of inflation or econo
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mic growth.Measurement of the social equity of a tax and determining whether a tax sys
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tem discriminates against certain taxpayers are issues that are examined by sociologists a
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nd political scientists.
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Finally, attorneys are responsible for the interpretation of the taxation statutes, and accou
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ntantsensure that these same statutes are applied consistently.****8880()
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Page 4 jo

,Federal Tax Research, 13th Edition
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1-2. The other major categories of tax practice in addition to tax research are as follows:
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 Tax compliance
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 Tax planningjo




 Tax litigatio
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nPage 5
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1-3.

Tax compliance consists of gathering pertinent information, evaluating and classi
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fying that information, and filing any necessary tax returns. Compliance also includes oth
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er functions necessary to satisfy governmental requirements, such as representing a clie
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nt during an InternalRevenue Service (IRS) audit.
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1-4.

Most of the tax compliance work is performed by commercial tax preparers, enrol
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led agents (EAs), attorneys, and certified public accountants (CPAs). Noncomplex individ
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ual, partnership,and corporate tax returns often are completed by commercial tax prepar
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ers. The preparation of more complex returns usually is performed by EAs, attorneys, an
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d CPAs. The latter groups alsoprovide tax planning services and represent their clients be
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fore the IRS. jo jo




An EA is one who is admitted to practice before the IRS by passing a special IRS-
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administered examination, or who has worked for the IRS for five years and is issued a per
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mit to represent clients before the IRS. CPAs and attorneys are not required to take this exa
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mination and are automatically admitted to practice before the IRS if they are in good stan
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ding with the appropriateprofessional licensing board.
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Page 5 and Circular 230
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1-5.

Tax planning is the process of arranging one‘s financial affairs to minimize any tax lia
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bility. Muchof modern tax practice centers around this process, and the resulting outcome is
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