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NOTE: ACTG 425 is not being offered
during Summer 2008.
The course materials below are for reference purposes only.
Version 1
March 31 2008
ACTG 425
Advanced Tax
Spring 2008
Course
Name: Advanced Tax
Course Number: ACTG 425
Course Credits: Four
Course Schedule: BA 425 meets twice per week in two hour blocks on Mondays and Wednesdays 8:00 am – 9:50 pm
Course Location Bexell Room 415
Prerequisites: A grade of “C” or better in BA 325
Instructor:
Larry L.
Brown,
CPA
Office:
Bexell 429
Phone: 541 737 3226 (Do not leave messages)
503 799 2686 (Cell phone - leave messages)
E-mail larry.brown@bus.oregonstate.edu
Office Hours: Monday 10:15 am-- 11:45 am
Tuesdays 8:30 am- 9:30 am (recommend appointment)
Wednesday 10:15 am-11:45 pm
Or by appointment (I will be on campus virtually all day on Mondays)
Learning Resources: Textbook:
Principles of Taxation for Business and Investment Planning; published by McGraw, Hill, Irwin; authors Sally M. Jones and Shelley C. Rhoades-Catanach
Other reading and resource material:
Internal Revenue Code (IRC) (b) ; Income Tax Regulations (b)
2007 U.S. Master Tax Guide (c)
Statement of Financial Accounting Standards No.109-Accounting for Income Taxes (a) (b)
Department of Treasury Circular No. 230-Regualtions Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries and Appraisers before the Internal Revenue Service (a) (b)
AICPA Statements on Standards for Tax Services No. 1-8 (a) (b)
AICPA Statements on Standards for Tax Services Interpretation No. 1-2 (a) (b)
IRS Publication1 Your Rights as a Taxpayer (b) (d)
IRS Publication 5 Your Appeal Rights and How to Prepare a Protest If You Don’t Agree (b) (d)
IRS Publication 556 Examination of Returns, Appeal Rights, and Claims for Refund (b) (d)
IRS Publication 594 The IRS Collection Process (b) (d)
IRS Publication 1660 Collection Appeal Rights (b) (d)
IRS Publication 538 Accounting Periods and Methods (b) (d)
IRS Publication 950 Introduction to Estate and Gift Taxes (a) (d)
IRS Publication 559 Survivors, Executors, and Administrators (b) (d)
IRS Publication 17 Your Federal Income Tax (c)
IRS Forms and Instructions:
Forms and Instructions for 1040 and all related schedules and forms (2007) (b) (d)
Forms and instructions for 1120 and all related schedules and forms (2007) (b) (d)
(a) Copies of these materials will be available for your use in Bexell Hall (my office and Beta Alpha Psi tutor center)
(b) This information is available on-line either directly or through the library web site at http://osulibrary.oregonstate.edu/research/srg/business/accounting.html
(c) Copies will be provided to the extent available
(d) This information may also be available at the local IRS office or library. The IRS office in downtown Portland, Oregon generally has a copy of each of these.
Course Description: This course covers concepts related to the federal income tax system as it applies to individuals, corporations, S corporations, partnerships, limited liability companies, and estates and trusts and non-profit entities. Emphasis is also placed on refining the ability to research income tax issues, understanding GAAP requirements of accounting for income taxes and ethical considerations with respect to preparing income tax returns and providing income tax planning advice. This is a tough and time-consuming course. Make sure your schedule allows you sufficient time to succeed in this course.
Measurable Student
Learning Outcomes: The primary learning outcomes of BA 425 are to acquire sufficient knowledge and comprehension of the internal revenue code and regulations and federal income tax forms and an understanding of tax research that will allow you to apply income tax concepts and income tax law with respect to individuals, corporations, S corporations, partnerships, limited liability companies, and estates and trusts to properly prepare income tax returns, to analyze and solve income tax compliance issues, to formulate solutions to complex income tax planning issues, to assess various income tax issues that are proposed based on the underlying facts and circumstances and to communicate your understanding of income tax issues to clients and colleagues. More specific daily learning objectives are included in the ‘Assignment Schedule’ below.
Classroom
Environment: BA 425 will be conducted primarily by lecture and classroom discussion. There will be some time devoted to discussing assignments. Please do not come into class late, read during class, or talk excessively with other students during lectures. TURN THE CELL PHONES OFF. Such behaviors are disruptive to the learning environment and disrespectful. Respect for your fellow students and instructors are of utmost importance. This is a cooperative learning environment and I want you to feel comfortable asking questions. I will never intentionally make you feel uncomfortable for doing so.
Evaluation of
Student Performance: Course requirements include exams and various homework assignments, as further discussed below. The weighting on the course requirements is as follows:
|
Assignment/Test |
Type |
Points |
|
First Day Examination |
Test |
5 |
|
Mid Term Examination |
Test |
65 |
|
Final Examination |
Test |
70 |
|
Assignments: |
|
|
|
No. 1 Memorandum with respect to a ‘good’ tax system |
Individual |
20 |
|
No. 2 Case studies with respect to ethical issues and considerations |
Group |
15 |
|
No. 3 Research memorandum with respect tax free exchanges |
Individual |
30 |
|
No. 4 Memo with respect to selecting appropriate accounting period and methods |
Individual |
20 |
|
No. 5 Questions from Chapters 3 and 4 (due April 28) |
Individual |
15 |
|
No. 6 Computation of deferred income taxes in accordance with SFAS #109 |
Individual |
25 |
|
No. 7 Memo regarding choosing the form of doing business |
|
|
|
A. General tax and non-tax factors |
Group |
10 |
|
B. Operations and distributions |
Group |
14 |
|
C. Other considerations |
Group |
6 |
|
No. 8 Research memo with respect to related party matters |
Individual |
20 |
|
Individual (Orange group) or Corporate (Black group) income tax returns with all |
Group |
70 |
|
supporting schedules and forms |
|
|
|
Class attendance and participation-presentations- (points awarded at sole discretion of instructor) |
Group |
5 |
|
Class attendance and participation-general (points awarded at sole discretion of instructor) |
Individual |
10 |
|
Total Possible Points |
|
400 |
Grade Distribution: Your course grade will be determined by your performance based on the total points earned with the assurance that the curve will be no higher than shown below. The curve may be lowered depending on the distribution of the total points for the class.
|
A |
368-400 |
|
A- |
360-367 |
|
B+ |
352-359 |
|
B |
329-351 |
|
B- |
320-328 |
|
C+ |
312-319 |
|
C |
288-311 |
|
C- |
280-287 |
|
D |
240-279 |
|
F |
Below 240 |
I will be pleased to discuss any grading related questions. However you must contact me if you have a question regarding graded items within the two week period beginning the day subsequent to the day the graded items are returned in class. You are responsible for tracking the points you earn on assignments and exams and comparing them to the posted scores. If you find a discrepancy, you must also notify me within 2 weeks of the original posting.
Examinations: There will be 3 multiple choice examinations. The first day examination is solely for benchmarking purposes and points will be awarded for taking the exam as opposed to correctness. You will (and must) make-up the first day examination if you miss the first class. The mid-term examination and the final examination will cover the information as set forth in the assignment schedule. The examinations will cover information included in the readings as well information and handouts provided during class. The final examination will be given according to the university final schedule. See the assignment schedule for examination dates. Make-up examinations will generally only be given under the following provisions (however the final examination must be taken at the scheduled time during finals week):
1. You have a medical emergency or illness/injury that prevents you from taking the examination at the scheduled time. You must provide medical documentation.
2. You have experienced a death in your immediate family that you will be able to document.
3. You are participating in an official Oregon State University event. You must make me aware of such commitment within two weeks of the scheduled examination date.
4. You experience some other unknown extreme circumstance that may require a make-up exam at my discretion.
The following items may be brought into the examinations:
· Calculator; pencil, highlighter and eraser
I will inform you in advance of the each of the examinations if additional information or materials, if any, will be allowed to be brought to the examination. I will provide any necessary tax rate schedules as well as other items that may be announced during class.
Assignments: Assignments are as set forth above in the ‘Evaluation of Student Performance’ and are due as set forth in the ‘Assignment Schedule’ below. The assignments I have selected are to reinforce the concepts covered in lecture, self study and reading. There are a variety of assignments including those related to technical income tax research, general tax related memos, income tax planning spreadsheet problems, computation of deferred income taxes and preparation of income tax returns as forth in the ’Evaluation of Student Performance’ above and the ‘Assignment Schedule’ below. Your ability to effectively and concisely communicate your knowledge (both verbally and in written form) is essential to a successful career. In addition, your ability to find answers to technical questions in a timely matter will determine your success in accounting or any other career that you choose. The purpose of the written memo assignments is to teach you how to research and communicate your findings in a professional manner, to analyze a situation and provide advice and to understand how to prepare a basic income tax return. The purpose of the income tax return assignments is to teach you how to accumulate the facts and prepare the required tax forms. All assignments are due within 15 minutes after class starts. No late assignments will be accepted except for situations similar to make-up exams discussed above. All assignments must be in professional format which means neatly hand-written or typed, proof read, clear, and accurate. Be aware that if I can not read your homework, it will not be graded and you will receive a score of 0. You may not resubmit homework if it is rejected as unreadable. You may wish to keep copies of your homework sets as they may not be returned to you before your examination. I will inform you any additional specific requirements and the basis of how points will be awarded for each of these assignments during the term.
Working in
Teams: For team assignments you should collaborate as a team with all team members contributing substantially equally and as set forth in the instructions, if any, to the assignment. If any team member believes that one of their team members is not contributing equally they should discuss this with the other team members and try to reach resolution. After you have had these discussions, please feel free to discuss with me if you believe that the team member is still not contributing equally. A team member that is determined to not be contributing substantially equally may be removed from the team and required to do the assignment on an individual basis.
For individual assignments listed in the syllabus you may work in a group to research and/or develop solutions to the assignments. However if you do so please adhere to the following:
1) You must each submit individual work You should not submit identical papers/solutions. Please include the names of others that you collaborated with on the top of the (first) page.
2) I strongly encourage you to develop your own solutions so you learn the subject matter and you do not become subject to the academic dishonesty rules discussed below.
Academic
Dishonesty: Academic Dishonesty is not tolerated. All University regulations regarding academic honesty apply to College of Business Courses. If you cheat in any way on a test or assignment, you will receive a zero on that item. Cheating includes copying test material, using unacceptable items during a test, copying or substantially using another students (regardless of when, where, why or how) writing or return, plagiarizing or using the ‘solutions’ to problems, assignments or the tax return provided to other students in previous classes. Academic dishonesty rules apply both to the originator and the copier. You should guard your work carefully. I do not tolerate dishonesty and any suspected dishonesty will be reported to the University and processed according to their published academic dishonesty procedures. See Statement of Expectations for Student Conduct at http://oregonstate.edu/admin/stucon/achon/htm.
Statement
Regarding Students
With Disabilities: Accommodations are collaborative efforts between students, faculty and Services for Students with Disabilities (SSD). Students with accommodations approved through SSD are responsible for contacting the faculty member in charge of the course prior to or during the first week of the term to discuss accommodations. Students who believe they are eligible for accommodations but who have not yet obtained approval through SSD should contact SSD immediately at 737-4098.
Assignment Schedule
This schedule is subject to change. If there are changes you will be informed in class.
You are responsible for all changes and other announcements made in class.
|
Date |
Topics |
Learning Outcomes |
Readings |
Assignments and notes |
|
Mar 31 MON |
Introduction Review learning resource material Review syllabus Scope of course Objectives of course
History of Income Tax Elements of good tax law Objectives of tax law
Income tax research Legislative process Competency in tax research Communicating results of tax research |
Introduction- Understand course objectives and requirements, gain an overview understanding of the course schedule, including reading requirements, assignments and tests.
Overview of Income Tax System- Review of basic standards for evaluating a tax system, tax avoidance versus tax evasion, drivers of income tax legislation, general concepts, accounting concepts, income concepts, deduction concepts.
Income Tax Research- Review primary sources of federal income tax law including legislative, administrative and judicial, review secondary sources of federal income tax law, review citations to primary authorities, review format for communicating research results. |
Textbook- Chapters 1 and 2
Textbook -Chapters 5 and Chapter 9 (See also April 7 and April 9) |
Assignment No. 1- Written memorandum with respect to a ‘good’ tax system
Due: Nothing. |
Date |
Topics |
Learning Outcomes |
Readings |
Assignments and notes |
|
April 2 WED |
Ethical tax practice standards Tax return positions Realistic possibility standard Knowledge of errors Form and content of advice
Treasury Department Circular No. 230
|
Ethical Tax Practice Standards-To gain an understanding of the applicable standards when recommending tax return positions and preparing or signing tax returns filed with any taxing authority.
Treasury Department Circular No. 230-To gain an understanding of the requirements of Circular No. 230. |
AICPA Statements on Standards for Tax Services No. 1-8
AICPA Statements on Standards for Tax Services Interpretation No. 1-2
Power Point slides of Department of Treasury (DOT) Circular No. 230 Optional reading: DOT Circular No. 230-Regualtions Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries and Appraisers before the Internal Revenue Service |
Assignment No. 2- Case studies with respect to ethical issues and considerations.
Due: Nothing. |
|
April 7 MON |
ORANGE GROUP
The individual Tax Formula Filing status Taxable income computation Computing individual tax Individual income tax credits Alternative Minimum Tax Payment and Filing Requirements
BLACK GROUP
Self study- Income tax research- See comments under April 2
|
To gain Obtain an understanding of the individual income tax system, requirements for filing, computing taxable income, relationship of standard deduction and itemized deductions, computing the exemption amount, computing the income tax, determining income tax credits and understanding the alternative minimum tax (AMT).
See comments under April 2 |
Textbook – Chapter 14
Textbook – Chapters 5 and 9 |
Individual Tax Case
This subject matter covered on Mid-term examination
Assignment No. 3- Research memo with respect to tax free exchanges
Due: Nothing |
|
Date |
Topics |
Learning Outcomes |
Readings |
Assignments and notes |
|
April 9 WED |
ORANGE GROUP
Self study- Income tax research- See comments under April 2
Self study Accounting periods Calendar year end Fiscal year end
Accounting methods Cash vs. accrual Installment sales Inventory issues Time value of money
BLACK GROUP
Taxable Income From Business Operations
Accounting periods Calendar year end Fiscal year end
Accounting methods Cash vs. accrual Installment sales Inventory issues Time value of money |
See comments under April 2
Accounting Periods- To gain an understanding of acceptable accounting periods (calendar, fiscal, 52/53 week), short periods, and mandatory periods for certain pass through entities and requirements for changes in accounting period. Accounting Methods-To gain an understanding of acceptable accounting methods (cash, accrual, hybrid and special methods with respect to certain items of income and expense) and requirements for changes in accounting method.
Accounting Periods- See notes above.
Accounting Methods- See notes above.
|
Textbook – Chapters 5 and 9
Master Tax Guide- Sections 1501-1531
IRS Publication 538
Textbook- Chapter 6
Master Tax Guide- Sections 1501-1531
IRS Publication 538 |
Assignment No. 3- Research memo with respect to tax free exchanges
Assignment No. 4 - Memo with respect to choosing accounting period and method.
Corporate Tax Case
This subject matter covered on Mid-term examination
Assignment No. 4 - Memo with respect to choosing accounting period and method
Due: Assignment No. 1 |
|
Date |
Topics |
Learning Outcomes |
Readings |
Assignments and notes |
|
April 14 MON |
ORANGE GROUP Investment and Personal Financial Planning Business versus investment activities Gain and loss from security transactions Capital gains and losses Investments in small corporate businesses Investment expenses Investment in real estate Investment in passive activities
BLACK GROUP Self study : Taxes as Transaction Costs Net Present Value Concepts Taxes and Cash Flows Structuring Transactions to Reduce Taxes Maxims of Income Tax Planning Tax Avoidance-Not evasion What makes planning possible? The entity variable The time period variable The jurisdiction variable The character variable Developing tax planning strategies
|
To gain an understanding of the tax consequences of various types of investments.
To gain an understan |