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

Federal64Tax64Research,6412th64E Page641-1
dition
Solution64Manual64Federal64Tax64Research6412th64Edition64by64Roby64Sawyers,64Steven6
4Gill




CHAPTER641
INTRODUCTION64TO64TAX64PRACTICE64AND64ETHICS



DISCUSSION64QUESTIONS


1-1.
In64the64United64States,64the64tax64system64is64an64outgrowth64of64the64following6
4five64disciplines:64law,64accounting,64economics,64political64science,64and64sociology.64Th

e64environment64for64the64tax64system64is64provided64by64the64principles64of64economics,64
sociology,64and64political64science,64while64the64legal64and64accounting64fields64are64respo
nsible64for64the64system‘s64interpretation64and64application.


Each64of64these64disciplines64affects64this64country‘s64tax64system64in64a64unique64way.64Ec
onomists64address64such64issues64as64how64proposed64tax64legislation64will64affect64the64rate
64of64inflation64or64economic64growth.64Measurement64of64the64social64equity64of64a64tax64

and64determining64whether64a64tax64system64discriminates64against64certain64taxpayers64are
64issues64that64are64examined64by64sociologists64and64political64scientists.

Finally,64attorneys64are64responsible64for64the64interpretation64of64the64taxation64statutes,64an
d64accountants64ensure64that64these64same64statutes64are64applied64consistently.


Page644


1-2. The64other64major64categories64of64tax64practice64in64addition64to64tax64research64are64as64follows:


 Tax64compliance
 Tax64planning
 Tax64litigatio


n64Page645


1-3.
Tax64compliance64consists64of64gathering64pertinent64information,64evaluating64and
64classifying64that64information,64and64filing64any64necessary64tax64returns.64Compliance64a

,Page641-2 SOLUTIONS64MANUA
L
lso64includes64other64functions64necessary64to64satisfy64governmental64requirements, 64such64

as64representing64a64client64during64an64Internal64Revenue64Service64(IRS)64audit.

,Federal64Tax64Research,6412th64E Page641-3
dition


Page645


1-4.
Most64of64the64tax64compliance64work64is64performed64by64commercial64tax64prep
arers,64enrolled64agents64(EAs),64attorneys,64and64certified64public64accountants64(CPAs).64N
oncomplex64individual,64partnership,64and64corporate64tax64returns64often64are64completed64
by64commercial64tax64preparers.64The64preparation64of64more64complex64returns64usually64is
64performed64by64EAs,64attorneys,64and64CPAs.64The64latter64groups64also64provide64tax64pl

anning64services64and64represent64their64clients64before64the64IRS.


An64EA64is64one64who64is64admitted64to64practice64before64the64IRS64by64passing64a64special6
4IRS-

administered64examination,64or64who64has64worked64for64the64IRS64for64five64years64and64is64
issued64a64permit64to64represent64clients64before64the64IRS.64CPAs64and64attorneys64are64not64
required64to64take64this64examination64and64are64automatically64admitted64to64practice64before6
4the64IRS64if64they64are64in64good64standing64with64the64appropriate64professional64licensing64

board.


Page64564and64Circular64230




1-5.
Tax64planning64is64the64process64of64arranging64one‘s64financial64affairs64to64minimize
64any64tax64liability.64Much64of64modern64tax64practice64centers64around64this64process,64and64

the64resulting64outcome64is64tax64avoidance.
There64is64nothing64illegal64or64immoral64in64the64avoidance64of64taxation64as64long64as64the6
4taxpayer64remains64within64legal64bounds.64In64contrast,64tax64evasion64constitutes64the64illega

l64nonpayment64of64a64tax64and64cannot64be64condoned.64Activities64of64this64sort64clearly64vi
olate64existing64legal64constraints64and64fall64outside64of64the64domain64of64the64professional64
tax64practitioner.


Page646


1-6.
In64an64open64tax64planning64situation,64the64transaction64is64not64yet64complete;64ther
efore,64the64tax64practitioner64maintains64some64degree64of64control64over64the64potential64tax6

, Page641-4 SOLUTIONS64MANUA
4liability,64and64the64transaction64may64be64modi- L

64fied64to64achieve64a64more64favorable64tax64treatment.64In64a64closed64transaction64however,6

4all64of64the64pertinent64actions64have64been64completed,64and64tax64planning64activities64may6

4be64limited64to64the64presentation64of64the64situation64to64the64government64in64the64most64le

gally64advantageous64manner64possible.