Taxation: Federal Income Tax
Taxation Assignment
Chpt1 #45
LO.5, 6 In March 2013, Jim asks you to prepare his Federal income tax returns for tax years 2010, 2011, and 2012. In discussing this matter with him, you discover that he also has not filed for tax year 2009. When you mention this fact, Jim tells you that the statute of limitations precludes the IRS from taking any action as to this year.
a. Is Jim correct about the application of the statute of limitations? Why or why not?
b. If Jim refuses to file for 2009, should you prepare returns for 2010 through 2012? Explain.
ANSWER
A) No. Since no return was filed, the statute of limitations never runs. But even if a return had been filed, the three-year period for the 2009 tax return would not expire Until April 15, 2012 (three years after the normal due date for filing).
B) Although you can only recommend that the return be filed, you cannot force him to do so. However, you should not undertake the engagement for 2010 through 2012 if you cannot correctly reflect the tax liability due to the omission for 2009
Chpt2 #49
LO.6 Using the legend provided, classify each of the following statements:
Legend
A
=
Tax avoidance
E
=
Tax evasion
N
=
Neither
a. Sue writes a $707 check for a charitable contribution on December 28, 2013, but does not mail the check to the charitable organization until January 10, 2014. She takes a deduction in 2013. Tax Evasion b. Sam decides not to report interest income from a bank because the amount is only $19.75. Tax Evasion c. Harry pays property taxes on his home in December 2013 rather than waiting until February 2014. Tax Avoidance d. Variet switches her investments from taxable corporate bonds to tax-exempt municipal bonds. Tax Avoidance e. Mel encourages his mother to save most of her Social Security benefits so that he will be able to claim her as a dependent. Tax Avoidance
Chpt3#
38. LO.3, 4 Sam and Elizabeth Jefferson file a joint return and
Chpt1 #45
LO.5, 6 In March 2013, Jim asks you to prepare his Federal income tax returns for tax years 2010, 2011, and 2012. In discussing this matter with him, you discover that he also has not filed for tax year 2009. When you mention this fact, Jim tells you that the statute of limitations precludes the IRS from taking any action as to this year.
a. Is Jim correct about the application of the statute of limitations? Why or why not?
b. If Jim refuses to file for 2009, should you prepare returns for 2010 through 2012? Explain.
ANSWER
A) No. Since no return was filed, the statute of limitations never runs. But even if a return had been filed, the three-year period for the 2009 tax return would not expire Until April 15, 2012 (three years after the normal due date for filing).
B) Although you can only recommend that the return be filed, you cannot force him to do so. However, you should not undertake the engagement for 2010 through 2012 if you cannot correctly reflect the tax liability due to the omission for 2009
Chpt2 #49
LO.6 Using the legend provided, classify each of the following statements:
Legend
A
=
Tax avoidance
E
=
Tax evasion
N
=
Neither
a. Sue writes a $707 check for a charitable contribution on December 28, 2013, but does not mail the check to the charitable organization until January 10, 2014. She takes a deduction in 2013. Tax Evasion b. Sam decides not to report interest income from a bank because the amount is only $19.75. Tax Evasion c. Harry pays property taxes on his home in December 2013 rather than waiting until February 2014. Tax Avoidance d. Variet switches her investments from taxable corporate bonds to tax-exempt municipal bonds. Tax Avoidance e. Mel encourages his mother to save most of her Social Security benefits so that he will be able to claim her as a dependent. Tax Avoidance
Chpt3#
38. LO.3, 4 Sam and Elizabeth Jefferson file a joint return and