SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH EDITION SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH
EDITION
SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH EDITION BY ROBY SAWYERS,
STEVEN GILL ALL CHAPTERS 1 – 13 COVERED GRADED A+ 100% VERIFIED.
,SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH EDITION
Page 1-2 SOLUTIONS MANUAL
CHAPTER 1
INTRODUCTION TO TAX PRACTICE AND ETHICS
DISCUSSION QUESTIONS
1-1. In the United States, the tax system is an outgrowth of the following five
disciplines: law, accounting, economics, political science, and sociology. The
environment for the tax system is provided by the principles of economics,
sociology, and political science, while the legal and accounting fields are
responsible for the system‘s interpretation and application.
Each of these disciplines affects this country‘s tax system in a unique way.
Economists address such issues as how proposed tax legislation will affect the
rate of inflation or economic growth. Measurement of the social equity of a tax
and determining whether a tax system discriminates against certain taxpayers
are issues that are examined by sociologists and political scientists.
Finally, attorneys are responsible for the interpretation of the taxation
statutes, and accountants ensure that these same statutes are applied
consistently.****8880()
Page 4
1-2. The other major categories of tax practice in addition to tax research are as follows:
• Tax compliance
• Tax planning
• Tax
litigationPage 5
,SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH EDITION SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH
EDITION
1-3. Tax compliance consists of gathering pertinent information, evaluating and
classifying that information, and filing any necessary tax returns. Compliance
also includes other functions necessary to satisfy governmental requirements,
such as representing a client during an Internal Revenue Service (IRS) audit.
Page 5
1-4. Most of the tax compliance work is performed by commercial tax preparers,
enrolled agents (EAs), attorneys, and certified public accountants (CPAs).
Noncomplex individual, partnership, and corporate tax returns often are
completed by commercial tax preparers. The preparation of more complex
returns usually is performed by EAs, attorneys, and CPAs. The latter groups
alsoprovide tax planning services and represent their clients before the IRS.
An EA is one who is admitted to practice before the IRS by passing a special IRS-
administered examination, or who has worked for the IRS for five years and is
issued a permit to represent clients before the IRS. CPAs and attorneys are not
required to take this examination and are automatically admitted to practice
before the IRS if they are in good standing with the appropriate professional
licensing board.
Page 5 and Circular 230
1-5. Tax planning is the process of arranging one‘s financial affairs to minimize any
tax liability. Much of modern tax practice centers around this process, and the
resulting outcome is tax avoidance.
There is nothing illegal or immoral in the avoidance of taxation as long as the
, SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH EDITION
Page 1-4 SOLUTIONS MANUAL
taxpayer remains within legal bounds. In contrast, tax evasion constitutes the
illegal nonpayment of a tax and cannot be condoned. Activities of this sort clearly
violate existing legal constraints and fall outside of the domain of the
professional tax practitioner.
Page 6
1-6. In an open tax planning situation, the transaction is not yet complete; therefore,
the tax practitioner maintains some degree of control over the potential tax
liability, and the transaction may be modi- fied to achieve a more favorable tax
treatment. In a closed transaction however, all of the pertinent actions have been
completed, and tax planning activities may be limited to the presentation of the
situation to the government in the most legally advantageous manner possible.
Page 6
1-7. Tax litigation is the process of settling a dispute with the IRS in a court of law.
Typically, a taxattorney handles tax litigation that progresses beyond the final
IRS appeal.
Page 6
1-8. CPAs serve is a support capacity in tax litigation.
Page 6
1-9. Tax research consists of the resolution of unanswered taxation questions. The tax
research process includes the following:
1. Identification of pertinent issues;
2. Specification of proper authorities;
3. Evaluation of the propriety of authorities; and,
EDITION
SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH EDITION BY ROBY SAWYERS,
STEVEN GILL ALL CHAPTERS 1 – 13 COVERED GRADED A+ 100% VERIFIED.
,SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH EDITION
Page 1-2 SOLUTIONS MANUAL
CHAPTER 1
INTRODUCTION TO TAX PRACTICE AND ETHICS
DISCUSSION QUESTIONS
1-1. In the United States, the tax system is an outgrowth of the following five
disciplines: law, accounting, economics, political science, and sociology. The
environment for the tax system is provided by the principles of economics,
sociology, and political science, while the legal and accounting fields are
responsible for the system‘s interpretation and application.
Each of these disciplines affects this country‘s tax system in a unique way.
Economists address such issues as how proposed tax legislation will affect the
rate of inflation or economic growth. Measurement of the social equity of a tax
and determining whether a tax system discriminates against certain taxpayers
are issues that are examined by sociologists and political scientists.
Finally, attorneys are responsible for the interpretation of the taxation
statutes, and accountants ensure that these same statutes are applied
consistently.****8880()
Page 4
1-2. The other major categories of tax practice in addition to tax research are as follows:
• Tax compliance
• Tax planning
• Tax
litigationPage 5
,SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH EDITION SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH
EDITION
1-3. Tax compliance consists of gathering pertinent information, evaluating and
classifying that information, and filing any necessary tax returns. Compliance
also includes other functions necessary to satisfy governmental requirements,
such as representing a client during an Internal Revenue Service (IRS) audit.
Page 5
1-4. Most of the tax compliance work is performed by commercial tax preparers,
enrolled agents (EAs), attorneys, and certified public accountants (CPAs).
Noncomplex individual, partnership, and corporate tax returns often are
completed by commercial tax preparers. The preparation of more complex
returns usually is performed by EAs, attorneys, and CPAs. The latter groups
alsoprovide tax planning services and represent their clients before the IRS.
An EA is one who is admitted to practice before the IRS by passing a special IRS-
administered examination, or who has worked for the IRS for five years and is
issued a permit to represent clients before the IRS. CPAs and attorneys are not
required to take this examination and are automatically admitted to practice
before the IRS if they are in good standing with the appropriate professional
licensing board.
Page 5 and Circular 230
1-5. Tax planning is the process of arranging one‘s financial affairs to minimize any
tax liability. Much of modern tax practice centers around this process, and the
resulting outcome is tax avoidance.
There is nothing illegal or immoral in the avoidance of taxation as long as the
, SOLUTION MANUAL FEDERAL TAX RESEARCH 13TH EDITION
Page 1-4 SOLUTIONS MANUAL
taxpayer remains within legal bounds. In contrast, tax evasion constitutes the
illegal nonpayment of a tax and cannot be condoned. Activities of this sort clearly
violate existing legal constraints and fall outside of the domain of the
professional tax practitioner.
Page 6
1-6. In an open tax planning situation, the transaction is not yet complete; therefore,
the tax practitioner maintains some degree of control over the potential tax
liability, and the transaction may be modi- fied to achieve a more favorable tax
treatment. In a closed transaction however, all of the pertinent actions have been
completed, and tax planning activities may be limited to the presentation of the
situation to the government in the most legally advantageous manner possible.
Page 6
1-7. Tax litigation is the process of settling a dispute with the IRS in a court of law.
Typically, a taxattorney handles tax litigation that progresses beyond the final
IRS appeal.
Page 6
1-8. CPAs serve is a support capacity in tax litigation.
Page 6
1-9. Tax research consists of the resolution of unanswered taxation questions. The tax
research process includes the following:
1. Identification of pertinent issues;
2. Specification of proper authorities;
3. Evaluation of the propriety of authorities; and,
