Tax Research

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Date : September 22, 2022

To : ACCT 6356.501

From : John Gamino

Subject: Project Memorandum Assignment

Your research project for this course requires you to competently research an area of the tax law and write (in a professional manner) and timely submit a file memorandum that is adequately supported with properly cited tax authorities.

Due : Thursday, November 17th, not later than 6:00 p.m.

Length : Minimum 1,500 words, excluding header and footnotes (12-point font, one-inch margins, single-spaced preferred). A submission under that wordcount minimum risks point deductions.

Authorities : Do not include an APA-style list of references; instead, include correct

and complete citations as footnotes. Worth : Up to 15 points (15% of final grade for the course).1

Use the memo format of your choice but include your name. Submit your work –

• by email (not via eLearning), and • as a Word document (you may also include a pdf of your Word memo if you care to).

Note: Your memorandum will be submitted (by me) through a plagiarism software program. This assignment asks you to critique the AICPA’s quantitative definitional guidance as to the meaning of those return-position “comfort levels” that are below “more likely than not,” i.e. –

• “substantial authority” (“approximately a 40 percent likelihood that the position will be upheld on its merits…”);

• “realistic possibility of success (“approximately a one-in-three (33 percent) likelihood that the position will be upheld on its merits…”);

• “reasonable basis” (“approximately a 20 percent likelihood that the position will be upheld on its merits…”).

1 Work submitted within a 24-hour grace period will be accepted but will be worth up to 10 points only. Also, points will be deducted for poor citation style as well as for spelling or grammatical errors and other abuse of the English language unbecoming of a college graduate.

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Two of these standards are defined by regulation, but only narratively. Reg. 1.6662-3(b)(3) defines “reasonable basis” as “a relatively high standard of tax reporting, that is, significantly higher than not frivolous or not patently improper.” Reg. 1. 6662-4(d)(2) defines “substantial authority” as where “the weight of the authorities supporting the treatment is substantial in relation to the weight of authorities supporting contrary treatment.” I am particularly interested in your researched and thereby informed opinion as to the following specific questions:

1. Is there any current statutory or regulatory basis for the AICPA’s inclusion of the “realistic possibility of success” standard (however defined) in its description of “various reporting standards” (Interpretations of Statement on Standards for Tax Services No. 1 at 4)? If yes, please provide full details as to what current statutory or regulatory role this standard plays.

2. Is there any caselaw support for the AICPA’s definition of “realistic possibility of

success” as meaning approximately a 33% chance of success on the merits? If so, please provide full details.

3. Is there any caselaw support for the AICPA’s definition of “reasonable basis” as meaning

approximately a 20% chance of success on the merits? If so, please provide full details.

4. Is there any caselaw support for the AICPA’s definition of “substantial authority” as meaning approximately a 40% chance of success on the merits? If so, please provide full details.

5. Is there any caselaw suggesting that any of these three reporting standards can or should

be defined in terms of any different percentage or any other quantitative measure? If so, please provide full details.

6. Is there any caselaw suggesting that any of these three reporting standards cannot or

should not be defined in quantitative terms? If so, please provide full details.

7. Are there any administrative authorities or secondary sources speaking to the meaning of these standards in either quantitative or narrative terms? If so, please provide full details.

You need not necessarily address each of these questions. Your answers to those that you do choose to respond to should be reasonably complete while efficiently stated (please don’t write an encyclopedia). Footnote citations or links to your source documents should be in good form, meaning that I should be able to use your citation to quickly find your source document in Lexis, Checkpoint, or elsewhere. Finally, a gentle reminder regarding scoring, from the Syllabus: In general, all scoring of students’ written submissions (weekly assignments, memorandum project) will be relative to the class performance as a whole. Although attainment of research and

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writing skills at an entry-professional-level certainly is the goal of the course, no rubric or abso- lute standard of excellence realistically can be used to assess learning. Accordingly and for all assigned submissions, the best work submitted by any student(s) will earn the maximum avail- able points; all other work will be measured against that ad hoc standard.

* * * * In your transmittal email you must affirm that you worked completely alone, that you neither sought nor received assistance from any other person, that you did not share work in any manner, and that in all other respects you adhered strictly to the Code of Conduct, which prohibits –

a. Plagiarism: The adoption or reproduction of ideas, words, statements, images or works of another as one's own or work offered for credit without appropriate attri- bution.

b. Cheating: Includes but is not limited to the use or attempted use of unauthorized materials, information, or study aids in any academic exercise; the use of sources beyond those authorized by the instructor in completing any academic exercise or, engaging in any behavior specifically prohibited by the faculty member in the course syllabus or class discussion. Academic exercise includes all forms of work submitted for credit or hours.

c. Fabrication: Falsification or creation of any information, data or citation in an academic exercise.

d. Collaboration and/or Collusion: Seeking or providing aid to another student in completion of any assignment submitted for academic credit without explicit au- thorization from the faculty member.