- In the following independent situations, is the tax position of the taxpayer likely to change? Explain why or why not.
In the following independent situations, is the tax position of the taxpayer likely to change? Explain why or why not.
. In the following independent situations, is the tax position of the taxpayer likely to change? Explain why or why not.
a. John used to make casual purchases and sales of real estate as an investor. Currently, he does so on a regular basis and has obtained a license as a dealer.
b. Theresa quit a job as a staff accountant and has established her own practice as a CPA.
c. After saving enough for a down payment, Paul has purchased a personal residence.
2. The sixteenth Amendment to the U.S. Constitution was passed to overturn a Supreme Court decision that had invalidated the federal income tax. Do you agree? Why or why not?
3. Distinguish between taxes that are proportional and those that are progressive.
4. How does the pay-as-you-go procedure apply to wage earners? To persons who have income from sources other than ages?
5. When Oprah gave away Pontiac G6 sedans to her TV Audience, was the value of the cars taxable? On Labor Day weekend in 2006, World furniture Mall in Plano, Illinois, gave away $275,000 of furniture because the Chicago Bears shut out the Green Bay Packets in the team's football season opener at Lambeau Field in Green Bay (26-0). Was the furniture in the form of a discount or rebate taxable or should the furniture company have handed the customers a Form 1099-MISC?
6. You are interviewing a client before preparing his tax return. He indicates that he did not list his income $96,000 received as a recovery for false imprisonment. What should you do with respect to this significant recovery?
Partial list of research aids:
Daniel and Brenda Stadnyk, T.C.Memo. 2008-289.
Rev.Rul. 2007-14, 2007-1 C.B. 747. 104.
7. Locate IRS Form 210 (at www.irs.gov), and answer the following questions.
a. Who must sign the form?
b. Who must file the form?
c. Can it be used for someone who is not related to the taxpayer? Explain.
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