Tax Ethics assignment

Ethics Assignment

Due Monday, October 18, 2015

Please limit to one page (Arial font, size 12, single space).

Topic – select ONE from below:

Bob entered a contract to sell a parcel of land at a $25,000 gain in 2011. To avoid reporting the gain in 2011, he wrote the contract to close the sale and deliver title to the land to the buyers on January 2, 2012.

Betty applied for and received a Social Security number for Kate, her pet cat. Surprised by how easy it was to get a Social Security number, she decided to claim a dependent exemption on her tax return for Kate. Other than being a cat, Kate met all the tests for a dependent.

Glen put money in savings accounts in 50 different banks. He knows a bank is not required to report interest paid that totals less than $10. Because the banks do not report the payments to the IRS, Glen does not show the interest he receives as income.

Suggested outline:

Facts – describe the facts.

Evasion or avoidance – define whether the situation described is tax evasion or avoidance and explain why.

If you were the CPA filing the return for this individual, what would you do? Use SSTS to explain. See below in “Helpful Links” on where to find applicable SSTS and what they mean.

Grade 25 points

Correct conclusions (avoidance/evasion) – 5 points

Clear reasoning for the above conclusion – 10 points

Correct recommended course of action for the CPA – 5 points

Grammar and syntax – 5 points

Helpful Links

See Chapter 2, LO 2-6, Page 2-23 and 2-24. Specifically, pay attention to SSTS No.1, No. 2, and No. 3.

http://blog.aicpa.org/2012/03/how-do-you-define-ethics.html#sthash.w9j7gwBH.dpbs

http://www.aicpa.org/RESEARCH/STANDARDS/TAX/Pages/default.aspx