Tax Research
The ability to locate current and relevant facts in order to support a tax question position is one of the most valuable skills a tax preparer can possess. During this course you will develop a tax research project based upon specific tax service situations and issues. This project will provide you with an opportunity to improve your tax research and presentation skills, thus helping to prepare you for effective tax planning and preparation.
In Module 5, you selected one of the two scenarios. Then, you investigated applicable resources and provided an annotated bibliography (identifying at least three different resources) for your selection.
Scenario 1: Business Vehicle Deductions
Your client, a physician, recently purchased a yacht on which he flies a pennant with a medical emblem on it. He recently informed you that he purchased the yacht and displays the pennant to advertise his occupation and thus attract new patients. He has asked you if he can deduct, as ordinary and necessary business expenses, the costs of maintaining the yacht. In your project, explain the steps you must take to find the answer.
For this activity, you will develop a research paper based upon your selected tax scenario. Consider the following questions (but not limited to) for inclusion in your research project:
1. What tax regulations support and/or limit deductions taken?
2. What questions would you ask the client to substantiate the deductions taken?
3. What would result if the tax return you prepared were audited?
4. What approach would you use to prioritize the results of the information you find during your research?
5. How would this information be useful if you owned a business?
Your submission should be at least 4-6 pages in length (not including title and reference pages). Use 12-point, Times New Roman font, double-spaced, with one-inch margins. Use APA style format when citing any sources.
Answer preview
In day to day business operations, companies may require the use of vehicles to facilitate some of their business operations that may occur daily or occasionally. There exist laws that allow certain deductions to be made for such business vehicles although the rules have their specifics and do not apply to all the types of machinery. The differences arise because some vehicles help in the daily business operations whereby without them the business cannot run. However, some vehicles are merely used to facilitate the working of the company such as cleaning trucks and dumping trucks (Jordan, 2014). Therefore, every business should consider the class where their vehicle lies to be able to decide whether deducting it from their financial statements as an expense would have any negative implications especially when auditing is concerned…
(1300 words)