Tax Memo

Tax Memo

Paper details:
This is a tax research assignment. But, it has to be written as a tax memo. I will attach a sample and a case study to go off of. DO NOT WRITE THIS LIKE AN ESSAY. It is not an essay. I got a 16% on the last assignment I had you guys help me with because it was in APA essay form. Also, for references, IRC code is whats required and NOT IRS publication. Please see attachments.

The facts for your third Tax Research Assignment are as follows:
Elizabeth Collins is a huge college basketball fan.  In the past, she has always bought basketball tickets on the street from ticket scalpers.  This year, she decided to join the university’s ticket program, which requires a $2,000 contribution to the university for the “right” to purchase tickets.  Elizabeth will then pay $400 per season ticket.  Elizabeth understands that the price paid for the season tickets is not tax deductible as a charitable contribution.  However, contributions to a university are typically tax deductible.

Instructions:
Research the tax law to determine how much, if any, of Elizabeth’s $2,000 contribution for the right to purchase tickets is tax deductible.  Then, write a letter to Elizabeth of no more than two pages, communicating the results of your research, and identifying any relevant statutory, administrative, or judicial authority.  Remember, you are writing to a non-CPA, so be sure to explain your reasoning clearly and in layperson’s terms.
Use the format for communicating research findings discussed under “Syllabus and Course Schedule to the file named, “Tax Research Assignment How to Complete – and Sample Client Letter” in the Content area of LEO. Notice how, in that example, there are citations to authority within the body of the letter. I expect you to also cite to relevant authority, in the same citation formats that you used for your tax memoranda.
Identify relevant statutory, administrative, and judicial authorities and discuss how these authorities affect your conclusion concerning the deductibility of the tickets.
*Remember: while IRS publications are useful as secondary sources, they are not primary sources that can be cited and relied upon in your written product.
Your research assignment will be graded using the following criteria:
1. Recognition of the important facts and issues
2. Correct conclusion
3. Clarity of writing (and appropriateness of level, considering your audience)
4. Proper use of relevant sources to support your conclusion and analysis
5. Proper citation of relevant sources
6. Proper format, spelling & grammar

The five steps in tax research are:
•         understand the facts
•         identify issues
•         locate relevant authorities
•         analyze the tax authorities
•         communicate research results.
The two types of tax services that tax professionals use in tax research are annotated tax services, arranged by code section, and topical services, arranged by topic.
Research questions often consist of questions of fact or questions of law.
•         The answer to a question of fact hinges upon the facts and circumstances of the taxpayer’s transaction.
•         The answer to a question of law hinges upon the interpretation of the law, such as interpreting a particular phrase in a code section.
When the researcher identifies that different authorities have conflicting views, she should evaluate the “hierarchy,” jurisdiction, and age of the authorities.
Once the tax researcher has identified relevant authorities, she must make sure that the authorities are still valid and up to date.
The most common end product of a research question is a research memo, which has five basic parts: (1) facts, (2) issues, (3) authority list, (4) conclusion, and (5) analysis.
Sample Research Memo
Facts:   Discuss facts relevant to the question presented—that is, facts that provide necessary background of the transaction (generally, who, what, when, where, and how much) and those facts that may influence the research answer. Keeping the fact discussion relatively brief will focus the reader’s attention on the relevant characteristics of the transaction.
Issues: State the specific issues that the memo addresses. This section confirms that you understand the research question, reminds the reader of the question being analyzed, and allows future researchers to determine whether the analysis in the memo is relevant. Issues should be written as specifically as possible and be limited to one or two sentences per issue.
Authorities: In this section, the researcher cites the relevant tax authorities that apply to the issue, such as the IRC, court cases, and revenue rulings. How many authorities should you cite? Enough to provide a clear understanding of the issue and interpretation of the law. Remember, in order to reach an accurate assessment of the strength of your conclusion, you should consider authorities that may support your desired conclusion, as well as those that may go against it.
Conclusion: There should be one conclusion per issue. Each conclusion should answer the question as briefly as possible, and preferably indicate why the answer is what it is.
Analysis: The goal of the analysis is for the researcher to provide the reader a clear understanding of the area of law and specific authorities that apply. Typically, an analysis will be organized to discuss the general area(s) of law first (the code section) and then the specific authorities (court cases, revenue rulings) that apply to the research question. How many authorities should you discuss? As many as necessary to provide the reader an understanding of the issue and relevant authorities. After you discuss the relevant authorities, apply the authorities to your client’s transaction and explain how the authorities result in your conclusion.
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Client Letters  In addition to internal research memos, tax professionals often send their clients letters that summarize their research and recommendations. Basic components of the client letter include: (1) research question and limitations, (2) facts, (3) analysis, and (4) closing.
Here is a sample letter:

For this course you will have three tax research assignments.  This research assignment will include a memo and a client letter.
The facts for the first assignment are as follow:
In 2009, Mr. Smith purchased a principal residence for $1,500,000.  He made a down payment of $300,000 and financed the remainder by borrowing $1,200,000 through a loan secured by the residence.  In 2009, Mr. Smith paid interest that accrued on the indebtedness during that year.  He had no other debt secured by the residence.  May he deduct the entire amount of interest which was paid on the home loan?

Your research assignment will be graded using the following criteria:
1.      Recognition of the important facts and issues
2.      Correct conclusion
3.      Proper citation of relevant sources
4.      Format, Spelling & Grammar
5.      Clarity of writing

Tax Research Assignment 2.
The facts for this assignment are as follow:
R.E.M., a calendar year corporation and Athens, Georgia, band recently sold tickets ($20,000,000) for concerts scheduled in the United States for next year and the following year.  For financial statement purposes, R.E.M. will recognize the income from the tickets when it performs the concerts.  For tax purposes, it uses the accrual method and would prefer to defer the income from the ticket sales until it performs the concerts.  This is the first time that it has sold tickets one or two years in advance. Michael Stipe has asked your advice.
Your research assignment will be graded using the following criteria:
1.         Recognition of the important facts and issues
2.         Correct conclusion
3.         Proper citation of relevant sources
4.         Format, Spelling & Grammar
5.         Clarity of writing

Tax Research Assignment 3.
The facts for this assignment are as follow:
Mary and Bob have been married for 25 years.  They are both college professors.  Mary (50 years of age) makes $65,000 annually and Bob (60 years of age) makes $75,000 annually.  Their oldest daughter is getting married.  Bob and Mary would like to either 1) take out a second mortgage on their home (they can get an interest rate of 7 percent) or 2) withdraw funds from their IRAs or 3) sell their rental property.  The cost of the wedding is $35,000.   The equity in their home is $150,000; they have $80,000 in IRAs between the two of them and the basis of the rental property is $20,000.  The rental property can be sold for $120,000.  Mary and Bob want to know how they should finance the wedding and if tax implications will be a factor.

Your research assignment will be graded using the following criteria:
6.      Recognition of the important facts and issues
7.      Correct conclusion
8.      Proper citation of relevant sources
9.      Format, Spelling & Grammar
10.  Clarity of writing