Solution Manual Federal Tax Research 12th Edition by Roby Sawyers, Steven Gill Chapters 1 -13

Federal77Tax77Research,7713th77 Page771-1
Edition

Solution Manual Federal Tax Research
13th Edition by Roby Sawyers, Steven Gill
Chapters 1 -13

,Page771-2 SOLUTIONS77MANUA
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CHAPTER771
INTRODUCTION77TO77TAX77PRACTICE77AND77ETHICS



DISCUSSION77QUESTIONS


1-1.
In77the77United77States,77the77tax77system77is77an77outgrowth77of77the77following
77five77disciplines:77law,77accounting,77economics,77political77science,77and77sociology.77T

he77environment77for77the77tax77system77is77provided77by77the77principles77of77economics,
77sociology,77and77political77science,77while77the77legal77and77accounting77fields77are77res

ponsible77for77the77system‘s77interpretation77and77application.


Each77of77these77disciplines77affects77this77country‘s77tax77system77in77a77unique77way.77Ec
onomists77address77such77issues77as77how77proposed77tax77legislation77will77affect77the77rate
77of77inflation77or77economic77growth.77Measurement77of77the77social77equity77of77a77tax77

and77determining77whether77a77tax77system77discriminates77against77certain77taxpayers77are
77issues77that77are77examined77by77sociologists77and77political77scientists.


Finally,77attorneys77are77responsible77for77the77interpretation77of77the77taxation77statutes,77a
nd77accountants77ensure77that77these77same77statutes77are77applied77consistently.****8880(
)
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1-2. The77other77major77categories77of77tax77practice77in77addition77to77tax77research77are77as77follows:


 Tax77compliance
 Tax77planning
 Tax77litigatio


n77Page775


1-3.
Tax77compliance77consists77of77gathering77pertinent77information,77evaluating77and
77classifying77that77information,77and77filing77any77necessary77tax77returns.77Compliance77a

lso77includes77other77functions77necessary77to77satisfy77governmental77requirements,77such77

,Federal77Tax77Research,7713th77 Page771-3
Edition as77representing77a77client77during77an77Internal77Revenue77Service77(IRS)77audit.

, Page771-4 SOLUTIONS77MANUA
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1-4.
Most77of77the77tax77compliance77work77is77performed77by77commercial77tax77prep
arers,77enrolled77agents77(EAs),77attorneys,77and77certified77public77accountants77(CPAs).77N
oncomplex77individual,77partnership,77and77corporate77tax77returns77often77are77completed77
by77commercial77tax77preparers.77The77preparation77of77more77complex77returns77usually77i
s77performed77by77EAs,77attorneys,77and77CPAs.77The77latter77groups77also77provide77tax77p
lanning77services77and77represent77their77clients77before77the77IRS.


An77EA77is77one77who77is77admitted77to77practice77before77the77IRS77by77passing77a77special7
7IRS-

administered77examination,77or77who77has77worked77for77the77IRS77for77five77years77and77is77
issued77a77permit77to77represent77clients77before77the77IRS.77CPAs77and77attorneys77are77not77
required77to77take77this77examination77and77are77automatically77admitted77to77practice77before7
7the77IRS77if77they77are77in77good77standing77with77the77appropriate77professional77licensing77

board.


Page77577and77Circular77230




1-5.
Tax77planning77is77the77process77of77arranging77one‘s77financial77affairs77to77minimize
77any77tax77liability.77Much77of77modern77tax77practice77centers77around77this77process,77and77

the77resulting77outcome77is77tax77avoidance.
There77is77nothing77illegal77or77immoral77in77the77avoidance77of77taxation77as77long77as77the7
7taxpayer77remains77within77legal77bounds.77In77contrast,77tax77evasion77constitutes77the77illega

l77nonpayment77of77a77tax77and77cannot77be77condoned.77Activities77of77this77sort77clearly77vi
olate77existing77legal77constraints77and77fall77outside77of77the77domain77of77the77professional77
tax77practitioner.


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1-6.
In77can77copen77ctax77cplanning77csituation,77cthe77ctransaction77cis77cnot77cyet77ccomple
te;77ctherefore,77cthe77ctax77cpractitionercmaintains77csome77cdegree77cof77ccontrol77cover77cthe