BA 425 Version 1 September 25, 2006
Advanced
Tax
Fall 2006
Course Number: BA
425
Course Credits: Four
Course Schedule: BA 425 meets twice per week in two hour blocks on Tuesdays and
Thursdays.
BA
425 meets from 4:00 pm – 5:50 pm
Course Location Bexell
Hall Room 103
Prerequisites: A
grade of “C” or better in BA 325
Phone:
541 737 3226 (Do
not leave messages)
503 799 2686 (Cell phone - leave messages)
E-mail larry.brown@bus.oregonstate.edu
Office Hours: Tuesday 6:15-7:15 pm
Wednesday 8:15 am-9:45 am
Thursday
2:30 pm-3:30 pm
Or by appointment
Learning Resources: Textbook:
Concepts in Federal Taxation, Murphy and Higgens 2006 edition.
Other reading and resource material:
Internal Revenue Code (IRC) (a) (b) ; Income Tax Regulations (a) (b)
2006
Federal Estate and Gift Taxes- Code and Regulations (a)
Statement of Financial Accounting Standards No.109-Accounting for Income Taxes (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 (b)
AICPA Statements on Standards for Tax Services No. 1-8 (b)
AICPA Statements on Standards for Tax Services Interpretation No. 1-2 (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 544 Sales and Other Dispositions of Assets (b) (d)
IRS Publication 541 Partnerships (b) (d)
IRS Publication 542 Corporations (b) (d)
IRS Publication 3402 Tax Issues for Limited Liability Companies (a) (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 (b) (d)
IRS Forms and Instructions:
Forms and Instructions for 1040 (2005) (b) (d); Forms and instructions for 1065 (2005) (b) (d)
Forms and instructions for 1120 (2005) (b) (d); Forms and instructions for 1120S (2005) (b) (d)
Forms and instructions for 706 (b) (d); Forms and instructions for 709 (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
Course Description: This course covers concepts related to the federal income tax system as it applies to corporations, S corporations, partnerships, limited liability companies, and estates and trusts. Emphasis is placed on understanding income tax planning for business owners. 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 primarily with respect to 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 |
|
Mid Term 1 |
Test |
55 |
|
Mid Term 2 |
Test |
55 |
|
Final |
Test |
55 |
|
Assignments: |
|
|
|
#1- Research memo with respect to tax avoidance versus evasion |
Individual |
20 |
|
#2- Memo with respect to comparison to other tax systems |
|
|
|
A. Comparison to British Tax system (Value Added Tax) |
Group |
10 |
|
B. Comparison to Canadian Tax system (Goods and Services Tax) |
Group |
10 |
|
C. Comparison to a national sales tax system |
Group |
10 |
|
#3- Income tax planning-buy or lease a home |
Individual |
15 |
|
#4- Memo with respect to selecting appropriate accounting period and methods |
Individual |
15 |
|
#5- Case studies with respect to ethical issues and considerations |
Group |
15 |
|
#6- Computation of deferred income taxes in accordance with SFAS #109 |
Group |
25 |
|
#7- Memo regarding choosing the form of doing business |
|
|
|
A. General tax and non-tax factors |
Group |
12 |
|
B. Operations and distributions |
Group |
12 |
|
C. Other considerations |
Group |
11 |
|
#8- Income tax returns--Corporation and Individual |
Group |
30 |
|
#9- Income tax returns--S Corporation and Individual |
Group |
30 |
|
#10-Income tax returns—Partnership and Individual |
Group |
30 |
|
#11-Research memo with respect to property disposition |
Individual |
20 |
|
#12-Research memo with respect to related party issues |
Individual |
20 |
|
#13-Preparation of gift tax return (Form 709) |
Group |
15 |
|
#14-Preparation of estate tax return (Form 706) |
Group |
15 |
|
Class attendance and participation-presentations |
Group |
10 |
|
Class attendance and participation-general |
Individual |
10 |
|
Total Possible Points |
|
500 |
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 |
460-500 |
|
A- |
450-459 |
|
B+ |
440-449 |
|
B |
410-439 |
|
B- |
400-409 |
|
C+ |
390-399 |
|
C |
360-389 |
|
C- |
350-359 |
|
D |
300-349 |
|
F |
Below 300 |
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 mid-term examinations 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
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: Homework
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
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
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.
A Little Personal
Background: I started my accounting career with Coopers & Lybrand (now
PricewaterhouseCoopers) in 1975 and was a partner in PwC from 1983 until my
retirement in 2005. I was located in
I assisted many of my clients in addressing
accounting, tax and operational issues such as identifying and analyzing
financing alternatives, evaluation of acquisition targets, entity formation and
structuring, preparing prospective financial information, evaluating capital
project alternatives, developing and evaluating accounting methods and
procedures and reviewing income tax planning strategies. .
I received
a Bachelor of Science degree in Business Administration (with a concentration
in Accounting) from
I am a member of the American Society of Certified
Public Accountants, Oregon Society of Certified Public Accountants. I have also belonged to numerous trade
associations over the years. I currently
serve on the complaints committee of the Oregon State Board of Accountancy. I am also a past Chairman of the Oregon Donor Program,
past Assistant Treasurer of the Juvenile Diabetes of Oregon, past Treasurer of
the
I met my wife, Joanne, at
In my retirement I plan on doing
some consulting, serve on the board of directors for a few companies and to
become more involved with nonprofit/charitable activities. I also plan on doing some traveling.
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 |
|
Assignments
and notes |
|
9/26 TUE |
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-
pages 4-6, 30-31, 45-66, 695-716 Master Tax Guide- Sections 2801, 2805, 2811, 2898 |
Assignment #1-
Research paper with respect to tax avoidance vs. tax evasion Assignment #2-
Memos with respect to comparison to other tax systems. Information with respect to
the introduction and the overview of the income tax system will not be
included on the mid-term examination #1.
Questions with respect to
income tax research will be included on mid-term examination #1. DUE: Nothing. |
|
Date |
Topics |
Learning
Outcomes |
|
Assignments
and notes |
|
9/28 THU |
IRS Audit and Appeals
Process Selection Examination process Settlement Appeals Collection Income Tax Planning Tax planning to maximize wealth Income tax rates Ordinary vs. capital gain Timing of income and deductions Choice of entity Method of accounting Accounting periods |
IRS Audit and Appeals Process- To gain an understanding of the IRS audit selection
and audit process including the appeals and collection process. Income Tax Planning- To gain an understanding of the significance of
income tax planning (vs. compliance) and to understand various drivers of
income tax planning such as income tax rate differentials, nature of income,
timing of transactions, entity choices and accounting periods and methods. |
Textbook-
21-23, 26-30 IRS Publication 1 IRS Publication 5 IRS Publication 556 IRS Publication 594 IRS Publication 1660 Additional optional reading: Master Tax
Guide- Sections 2701-2798 |
Assignment #3-
Income tax planning project re buy vs. lease/rent home. Questions with respect to
these topics will be included on mid-term examination #1. DUE: Nothing. |
|
10/3 TUE |
Accounting periods Calendar year end Fiscal year end Accounting methods Cash vs. accrual Installment sales Inventory issues Time value of money |
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.. |
Textbook-
Pages 51-52, 577-581, Master Tax Guide- Sections 1501-1531 IRS Publication 538 |
Assignment #4-
Memo with respect to choosing accounting period and method. Questions with respect to
these topics will be included on mid-term examination #1. DUE: Nothing. |
|
Date |
Topics |
Learning
Outcomes |
|
Assignments
and notes |
|
10/5 THU |
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 |