Tax accounting

ACC 403 Tax Research SPRING 2019

Your client (or professor) will not accept a late project (but will accept it early). Your client (or

professor) will not be able to review your project in advance of its final submission (and projects

submitted early will not be graded in advance of the due date).

Option 1 Facts:

Marino Corporation pays $6,500 to rent a 10-seat skybox for three football games in 2017 to use

for business entertainment at each game and paid an additional $6,500 for three additional games

in 2018. The price for a regular nonluxury box seat at each game is $45. How much can Marino

Corporation deduct for this entertainment expense? Hint: Sections 274(l)(2) and 274(n). Provide

an answer for both the 2017 and 2018 tax years.

Marino Corporation wants to make sure that all substantiation documentation is on file in case of

an audit by the IRS. So your assistance is requested to determine if any limits will be placed on

the company’s deduction for the skybox rental (the goal is to maximize the deduction for the

corporation).

Option 2 Facts:

Facts: Don has a very painful terminal disease and has learned that marijuana may mitigate his

pain. Don lives in a state in which it is legal to use the drug if its use is under the direction of a

medical doctor. Can Don deduct the cost of the marijuana as a medical expense? Hint: Rev. Rul.

97-9, 1997-1 CB 77

Required:

Research the above issues and prepare a “memo to file” as shown in your textbook on pages 86-

87. Your memo should have four sections: (1) facts, (2) issues (stated as questions), (3)

conclusions (short answers to each issue), and (4) discussion of your reasoning and authorities.

When writing the discussion section of your memo, start with the Internal Revenue Code section,

then the Regulation section, then any relevant IRS rulings or other pronouncements, and finally

any relevant court cases. Please be sure to include appropriate citations for any primary sources

you cite. You can use secondary authority to assist you in locating primary authorities, but you

cannot cite any secondary authorities in your memo to file (you must find the appropriate

primary authority and cite only that). You do not need to prepare a client letter—only the memo

to file. Submit one memo per group.

Watch the narrated PowerPoint presentation on how do to tax research using Checkpoint posted

on Blackboard under Assignments (approximately 34 minutes).

Look under Web Links on Blackboard for a link to Checkpoint. You can access Checkpoint from

anywhere you have an internet connection but you will need a user name and password to access

it (see user names and passwords next to the link under Web Links on Blackboard). Only one

student can use each user name at one time (so if you get the message that it is an invalid user

name then it means that someone else is using that particular user name – so select a different

one.) Checkpoint has a topical index that you may find easier to use than doing a keyword

search.

ACC 403 Tax Research SPRING 2019

Primary sources of authority that you can cite in your research memo include:

 Internal Revenue Code

 Regulations

 Court Cases

 Revenue Rulings

 Revenue Procedures

 Private Letter Rulings

 Technical Advice Memoranda

 Actions on Decisions

 IRS Notices

 You cannot cite any editorial sources such as explanations, analysis, annotations, or similar

summaries. These editorial sources may help you locate the above primary sources of authority,

but you can only cite primary sources.

You also cannot cite instructions for tax forms. IRS will not accept its instructions for tax forms

or general publications (such as IRS Pub. 17) as primary authority because they are intended

only to assist the general public in filling out forms. These general publications do not go

through the same detailed level of review at a national level as their other pronouncements listed

above under primary sources.

Your professor (or client) will not be able to review your project in advance of its final

submission so please do not ask the professor if you are on the right track in your research.