Solution manual for federal tax research 12th edition by roby sawyers steven gill

FederalVTaxVResearch,V12thVEditio PageV1-1
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Solution Manual Federal Tax Research 12th Edition by Roby Sawyers, Steven Gill



CHAPTERV1
INTRODUCTIONVTOVTAXVPRACTICEVANDVETHICS



DISCUSSIONVQUESTIONS


1-1.
InVtheVUnitedVStates,VtheVtaxVsystemVisVanVoutgrowthVofVtheVfollowingVfiveVdiscipl
ines:Vlaw,Vaccounting,Veconomics,VpoliticalVscience,VandVsociology.VTheVenvironmentVforVt
heVtaxVsystemVisVprovidedVbyVtheVprinciplesVofVeconomics,Vsociology,VandVpoliticalVscience
,VwhileVtheVlegalVandVaccountingVfieldsVareVresponsibleVforV theVsystem‘sVinterpretationV and
Vapplication.


EachVofVtheseVdisciplinesVaffectsVthisVcountry‘sVtaxVsystemVinVaVuniqueVway.VEconomistsVa
ddressVsuchVissuesVasVhowVproposedVtaxVlegislationVwillVaffectVtheVrateVofVinflationVorVecon
omicVgrowth.VMeasurementVofVtheVsocialVequityVofVaVtaxVandVdeterminingVwhetherVaVtaxVs
ystemVdiscriminatesVagainstVcertainVtaxpayersVareVissuesVthatVareVexaminedVbyVsociologistsV
andVpoliticalVscientists.
Finally,VattorneysVareVresponsibleVforVtheVinterpretationVofVtheVtaxationVstatutes,VandVaccoun
tantsVensureVthatVtheseVsameVstatutesVareVappliedVconsistently.


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1-2. TheVotherVmajorVcategoriesVofVtaxVpracticeVinVadditionVtoVtaxVresearchVareVasVfollows:


 TaxVcompliance
 TaxVplanning
 TaxVlitigatio


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1-3.
TaxVcomplianceVconsistsVofVgatheringVpertinentVinformation,VevaluatingVandVclassify
ingVthatVinformation,VandVfilingVanyVnecessaryVtaxVreturns.VComplianceValsoVincludesVother
VfunctionsVnecessaryVtoVsatisfyVgovernmentalVrequirements,VsuchVasVrepresentingVaVclientVd

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uringVanVInternalVRevenueVServiceV(IRS)Vaudit. L

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PageV5


1-4.
MostVofVtheVtaxVcomplianceVworkVisVperformedVbyVcommercialVtaxVpreparers,Venroll
edVagentsV(EAs),Vattorneys,VandVcertifiedVpublicVaccountantsV(CPAs).VNoncomplexVindividu
al,Vpartnership,VandVcorporateVtaxVreturnsVoftenVareVcompletedVbyVcommercialVtaxVpreparers.
VTheVpreparationVofVmoreVcomplexVreturnsVusuallyVisVperformedVbyVEAs,Vattorneys,VandVC
PAs.VTheVlatterVgroupsValsoVprovideVtaxVplanningVservicesVandVrepresentVtheirVclientsVbefore
VtheVIRS.


AnVEAVisVoneVwhoVisVadmittedVtoVpracticeVbeforeVtheVIRSVbyVpassingVaVspecialVIRS-
administeredVexamination,VorVwhoVhasVworkedVforVtheVIRSVforVfiveVyearsVandVisVissuedVaVper
mitVtoVrepresentVclientsVbeforeVtheVIRS.VCPAsVandVattorneysVareVnotVrequiredVtoVtakeVthisVex
aminationVandVareVautomaticallyVadmittedVtoVpracticeVbeforeVtheVIRSVifVtheyVareVinVgoodVstan
dingVwithVtheVappropriateVprofessionalVlicensingVboard.


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1-5.
TaxVplanningVisVtheVprocessVofVarrangingVone‘sVfinancialVaffairsVtoVminimizeVanyVtaxVl
iability.VMuchVofVmodernVtaxVpracticeVcentersVaroundVthisVprocess,VandVtheVresultingVoutcomeV
isVtaxVavoidance.
ThereVisVnothingVillegalVorVimmoralVinVtheVavoidanceVofVtaxationVasVlongVasVtheVtaxpayerVrem
ainsVwithinVlegalVbounds.VInVcontrast,VtaxVevasionVconstitutesVtheVillegalVnonpaymentVofVaVtax
VandVcannotVbeVcondoned.VActivitiesVofVthisVsortVclearlyVviolateVexistingVlegalVconstraintsVandV
fallVoutsideVofVtheVdomainVofVtheVprofessionalVtaxVpractitioner.


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1-6.
InVanVopenVtaxVplanningVsituation,VtheVtransactionVisVnotVyetVcomplete;Vtherefore,VtheVt
axVpractitionerVmaintainsVsomeVdegreeVofVcontrolVoverVtheVpotentialVtaxVliability,VandVtheVtrans
actionVmayVbeVmodi-
VfiedVtoVachieveVaVmoreVfavorableVtaxVtreatment.VInVaVclosedVtransactionVhowever,VallVofVtheV
pertinentVactionsVhaveVbeenVcompleted,VandVtaxVplanningVactivitiesVmayVbeVlimitedVtoVtheVpres

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L V mannerV possible
entationVofVtheVsituationVtoVtheVgovernmentVinVtheVmostVlegallyVadvantageous
.