ACCT 429 Week 7 Research Project
Performing tax research is an importa
nt part of tax practice. As outlined in Chapter 2 of your
textbook, tax law is developed through a number of different governmental entities. Congress
enacts the tax Code as statutory law. The Treasury Department is tasked with the
implementation of the
tax Code and, in the course of doing so, develops a number of
documents and materials to aid taxpayers in understanding the Treasury Department’s
interpretation of the code, including the Regulations. In turn, the Internal Revenue Service
(“IRS”) has the
direct responsibility for
implementing the tax Code and in assessing and
collecting the applicable tax from taxpayers. In the course of its duties, it also develops a
number of materials, including Revenue Rulings, Revenue Procedures, and Private Letter
Rulings, in which it sets forth its understanding of the tax laws. Finally, the federal courts
decide tax cases in which taxpayers contest the government’s interpretation of the tax laws. In
deciding these cases, the federal courts set forth binding inte
rpretation of what the tax laws
provide. All of these materials (often called primary resources) are important resources in
performing tax research. On top of these primary sources of tax law, there are a number of
secondary materials provided by various
organizations and publishers. These secondary
materials offer editorial analysis of the tax laws (somewhat akin to a Cliffs’ Notes
®
on tax laws)
to help tax practitioners understand the tax laws and apply them in given situations.
Just as with the first
project that was submitted in Week 3, t
he following assignment has
three
(
3
) different graded elements. Two of them require you to prepare tax file memoranda, while
the
remaining element requires
you to compose an essay answering the question asked. AS
S
UCH, YOU WILL BE SUBMITTING
THREE
SEPARATE DOCUMENTS FOR THIS ASSIGNMENT.
1.
The first two assignments require you to compose tax file memoranda. In each of these
problems, you will be given a fact pattern or issue that requires you
to decide
or analyze
a particular issue of tax law. You will also be provided with a number of the primary
sources discussed above
(
e.g.
, Revenue Rulings, cases)
on that issue of tax law.
You will
then compose a tax file memoranda concerning that taxpayer.
You can find det
ails as to
how to compose such a memorandum in Chapter 2 of your text, including a sample text
file memorandum in Figure 2.6 on page 2
–
26 of your text. Use the materials provided to
determine the proper solution to the taxpayer’s issues. In particular, d
iscuss the
materials in some detail in the “Analysis” section of the tax file memorandum. THIS IS
IMPORTANT! The most important part of any tax file memorandum is the thoroughness
of the analysis defending the conclusion reached in the memorandum. Accor
dingly,
most of the points awarded on the assignment are allocated to the “Analysis” sect
ion of
the memorandum. In assessing these assignments, consideration will be given to,
among other factors, (1) your accuracy in summarizing the relevant facts; (2) t
he
accuracy of your identification and statement of the “Issue” presented by the problem;
(3) the accuracy of your “Conclusion;” (4) the thoroughness and quality of your analysis
Week
7
Research Project (Set #
1
)
DeVry University Acct 429
offered in the “Analysis” section of your memorandum; and (5) the overall
pro
fessionalism of your memorandum (
e.g.,
presentation, use of proper grammar,
proper spelling, and quality of communication).
EACH OF THE TAX MEMORANDA
IS
WORTH
30
POINTS
, FOR A TOTAL OF
60
POINTS
.
2.
The remaining assignment require
s
you to perform some rese
arch on the Internet to
find relevant materials and to
analyze these materials.
As previously noted, in
performing this research, you may not take advantage of any resources other than those
specifically permitted by the assignment, including assignments
previously completed by
other students or other similar materials.
You will then complete an essay answering
the question or questions presented by
this
assignment. Your submission will be graded
on a number of factors, including (1) your ability to loca
te relevant research and
materials on the Internet; (2) your ability to analyze these resources; (3) your ability to
draw conclusions from these resources and to defend these conclusions with analysis of
the research and materials located; and (4) the over
all professionalism and content of
your essay (
e.g.,
presentation, use of proper grammar, proper spelling, and quality of
communication).
TH
IS
ESSAY
IS
WORTH
20
POINTS.
Please note that these assignments are worth a significant portion of your grade. As
such, you
should take them seriously, and leave yourself enough time to complete them. Do not wait
until the last weekend to begin these assignments. If you do, it will be very difficult for you to
submit quality responses to each of the four questions o
r problems posed. Please also note
that preparing these answers conscientiously will help you in preparing for the final
examination, given that you may be required to perform similar analyses on the exam. Should
you have a question, please ask your inst
ructor. Good luck!
Week
7
Research Project (Set #
1
)
DeVry University Acct 429
TAX RESEARCH MEMORANDUM ASSIGNMENT 1
As we learned in Week 4, the Code allows taxpayers to take a deduction for the cost of meals
when taxpayers have been deemed
to be “away from home” for tax purposes. This
determination can be difficult. Two separate clients came to you with questions as to whether
they are entitled to take a deduction for the cost of meals incurred during a particular trip. The
facts pertaini
ng to each are:
1.
Tracey is a sales representative for a national pharmaceutical company. She has a
rather large sales territory, and she makes her rounds to her customers using a
company
–
owned car over a 16
–
to 19
–
hour period of time. During these one
–
day
business trips, Tracey will pull over in a suitable location (such as a park or a rest
stop) and take a short nap in the backseat of her automobile.
2.
Mark captains a ferryboat. This ferryboat carries tourists on roundtrips from Seattle
to Victoria and
back, each trip of which lasts from 15 to 17 hours and provides for a
6
–
to 7
–
hour layover in Victoria. During the layover, Mark typically takes a four
–
hour
nap on a cot that he has stored in the pilothouse of the ferryboat.
Under each of these circumstan
ces, if the taxpayer entitled to deduct the cost of meals
purchased during the trip at issue?
COMPOSE A TAX FILE MEMORANDUM CONCERNING THIS ISSUE
FOR BOTH TAXPAYERS
USING
THESE FACTS AND THE RESEARCH MATERIALS PROVIDED
TO YOU IN THE NEXT FEW PAGES (
30
POI
NTS)
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