TEST BANK for Federal Tax Research 12th Edition by Roby Sawyers, Steven Gill||All chapters Covered || Latest Updated Guide A+ || ISBN:9780357366387||

Federal Tax Research, 13th Edition Page 1-1


Solution Manual Federal Tax Research
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m 13th Edition by Roby Sawyers, Steven Gill Cha
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pters 1 -13
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CHAPTER 1 m



INTRODUCTION TO TAX PRACTICE AND ETHICS
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DISCUSSIONmQUESTIONS


1-1.
InmthemUnitedmStates,mthemtaxmsystemmismanmoutgrowthmofmthemfollowingmfivemdisciplin
es:mlaw,maccounting,meconomics,mpoliticalmscience,mandmsociology.mThemenvironmentmformthem
taxmsystemmismprovidedmbymthemprinciplesmofmeconomics,msociology,mandmpoliticalmscience,mwh
ilemthemlegalmandmaccountingmfieldsmaremresponsiblemform themsystem‘sminterpretationm andmappli
cation.


Eachmofmthesemdisciplinesmaffectsmthismcountry‘smtaxmsystemminmamuniquemway.mEconomistsmad
dressmsuchmissuesmasmhowmproposedmtaxmlegislationmwillmaffectmthemratemofminflationmormeconom
icmgrowth.mMeasurementmofmthemsocialmequitymofmamtaxmandmdeterminingmwhethermamtaxmsystem
m discriminatesmagainstmcertainmtaxpayersmaremissuesmthatmaremexaminedmbymsociologistsmandmpo
liticalmscientists.

Finally,mattorneysmaremresponsiblemformtheminterpretationmofmthemtaxationmstatutes,mandmaccount
antsmensuremthatmthesemsamemstatutesmaremappliedmconsistently.****8880()
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1-2. Themothermmajormcategoriesmofmtaxmpracticeminmadditionmtomtaxmresearchmaremasmfollows:


• Taxmcompliance
• Taxmplanning
• Taxmlitigatio


nmPagem5


1-3.
Taxmcompliancemconsistsmofmgatheringmpertinentminformation,mevaluatingmandmclassifyi
ngmthatminformation,mandmfilingmanymnecessarymtaxmreturns.mCompliancemalsomincludesmothermf
unctionsmnecessarymtomsatisfymgovernmentalmrequirements,msuchmasmrepresentingmamclientmduri
ngmanmInternalmRevenuemServicem(IRS)maudit.

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1-4.
Mostmofmthemtaxmcompliancemworkmismperformedmbymcommercialmtaxmpreparers,menrolle
dmagentsm(EAs),mattorneys,mandmcertifiedmpublicmaccountantsm(CPAs).mNoncomplexmindividual,
m partnership,mandmcorporatemtaxmreturnsmoftenmaremcompletedmbymcommercialmtaxmpreparers.mTh
empreparationmofmmoremcomplexmreturnsmusuallymismperformedmbymEAs,mattorneys,mandmCPAs.m
ThemlattermgroupsmalsomprovidemtaxmplanningmservicesmandmrepresentmtheirmclientsmbeforemthemIR
S.


AnmEAmismonemwhomismadmittedmtompracticembeforemthemIRSmbympassingmamspecialmIRS-
administeredmexamination,mormwhomhasmworkedmformthemIRSmformfivemyearsmandmismissuedmamper
mitmtomrepresentmclientsmbeforemthemIRS.mCPAsmandmattorneysmaremnotmrequiredmtomtakemthismexa
minationmandmaremautomaticallymadmittedmtompracticembeforemthemIRSmifmtheymareminmgoodmstandi
ngmwithmthemappropriatemprofessionalmlicensingmboard.


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1-5.
Taxmplanningmismthemprocessmofmarrangingmone‘smfinancialmaffairsmtomminimizemanymtaxmli
ability.mMuchmofmmodernmtaxmpracticemcentersmaroundmthismprocess,mandmthemresultingmoutcomemism
taxmavoidance.
Theremismnothingmillegalmormimmoralminmthemavoidancemofmtaxationmasmlongmasmthemtaxpayermremai
nsmwithinmlegalmbounds.mInmcontrast,mtaxmevasionmconstitutesmthemillegalmnonpaymentmofmamtaxman
dmcannotmbemcondoned.mActivitiesmofmthismsortmclearlymviolatemexistingmlegalmconstraintsmandmfallm
outsidemofmthemdomainmofmthemprofessionalmtaxmpractitioner.


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1-6.
Inmanmopenmtaxmplanningmsituation,mthemtransactionmismnotmyetmcomplete;mtherefore,mthemta
xmpractitionermmaintainsmsomemdegreemofmcontrolmovermthempotentialmtaxmliability,mandmthemtransact
ionmmaymbemmodi-
m fiedmtomachievemammoremfavorablemtaxmtreatment.mInmamclosedmtransactionmhowever,mallmofmthempe
rtinentmactionsmhavembeenmcompleted,mandmtaxmplanningmactivitiesmmaymbemlimitedmtomthempresenta

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tionmofmthemsituationmtomthemgovernmentminmthemmostmlegallymadvantageousm mannerm possible.