Tax Research, Planning and Practice

2. Tax Research, Planning and Practice ACCT 6356

3. Tax Practice • ACCT 6356: Tax Research, Planning and Practice • Text: West’s Federal Tax Research, 6E, Raabe, Whittenburg, Sanders and Bost • ISBN: 0-324-12385-X • Lecturer: Art Agulnek, CPA • 972-883-xxxx • mailto: axa022000@utdallas.edu • art3601@attbi.com • Office: AHE 124 By Appointment. • Time: Thursday 7:00 – 9:45p.m. • Fax: 972-867-4245

4. Tax law derives from many disciplines • Law • Interpretation • Litigation • Accounting • Interpretation • Application • (cont’d)

5. Disciplines (cont’d) • Economics • Politics • Sociology

6. Tax Policy – Who Makes It? Made by: Administration / Treasury Impacted by: General public acceptance (All the disciplines discussed)

7. Tax Policy – Who Makes It? • Made by: Administration / Treasury • Impacted by: • General public acceptance • (All the disciplines discussed)

8. Tax Practice • Tax Practice: • = Application of the enacted legislation to specific accounting situations. • Or, more simply stated – application of facts to the law.)

9. Elements of a Tax Practice • Tax Compliance • Tax Planning • Tax Litigation • Tax Research

10. Tax Compliance • Gathering pertinent information • Evaluation of the information • Classification of the same information • Preparation of returns and other documents • Representation of clients before IRS in an “administrative proceeding.”

11. Tax Planning • Purpose – Optimization • Arranging one’s financial affairs in a manner as to optimize any tax liability. • “…. There is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. ………. for nobody owes any public duty to pay more than the law demands: taxes are forced extractions, not voluntary contributions.” (Justice Learned Hand, Comm. V. Newman, 159 F.2d 848 [CA-2, 1947]).

12. Tax Planning (cont.) • Tax avoidance vs. Tax evasion • Avoidance – planning, optimization • Evasion - A matter of “intent”to defraud the government • Open transactions vs. Closed transactions

13. Tax Planning (cont.) • Two major categories – when would you like your client to come see you? • Open transaction • Closed transaction

14. Tax Litigation • Process of settling a tax dispute in a court of law. • Generally handled by an attorney once a dispute becomes within the jurisdiction of a Federal court. • CPAs are beginning to infringe on lawyers’ historical role. • Accountants play an important role in an advisory or support capacity.

15. Tax Research • Identify / define the issues • Determine the authorities • Evaluate the authorities • Apply the authorities to the facts

16. Practice before the IRS • Authority – Circular 230 • Authorizes • Attorneys • Certified Public Accountants • Enrolled Agents • Enrolled Actuaries • But what about Return Preparers?

17. Questions?