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If the objectives of the federal tax system are multifaceted
and include raising revenues, providing investment incentives, encouraging
certain industries, and meeting desired social objectives, is it possible to
achieve a simplified tax system? Explain.

1.Sally and Tom are married, have three dependent children,
and file a joint return in 2019. If they have adjusted gross income (AGI) of
$90,000 and itemized deductions of $10,000, what is their tax – able income for
2019?
2. Discuss what is meant by the term “double taxa –
tion” of corporations. Develop an example of double taxation using a
corporation and shareho lder.

The Bruin Corporation, a C corporation, is owned 100% by
John Bean and had taxable income in 2019 of $500,000. John is also an employee
of the corporation. In December 2019, the corporation has decided to distribute
$400,000 to John and has asked you whether it would be better ro distribute the
money as a dividend or salary. John, a single taxpayer, is in the 37% marginal
tax bracket. How would you respond to Bruin Corporation? Consider only income
taxes for this problem.

The PDQ Partnership earned ordinary income of $150,000 in
2019. The partnership has three equal partners, Pete, Donald, and Quint. Quint,
who is single, uses the standard deduction, and has ocher income of $15,000
(nor connected with the partnership) in 2019. He receives a $30,000
distribution from the partnership during the year. What is Quint’s taxable
income in 2019?

1. What is the primary service function provided by the
National Office of the IRS?
2. What types of taxpayers are more likely to be audited by
the IRS?
3. a. What does the term “hazards of litigation”
mean in the context of taxation?
b. Why would the IRS or a taxpayer settle or compromise
a case based on the “hazards of litigation”?

Anya is concerned that she will be audited by the IRS.
a. Under what circumstances is it possible chat the IRS will
review each line item on her tax return?
b. ls it likely that all items on Anya’s return will be
audited?
2. If a taxpayer files his or her tax return and receives a
tax refund from the IRS, does this mean chat the IRS feels that the return is
correct and will not be subject to a future audit.

1.What is the stature of limitations for transactions
involving:
a. Fraud (e.g., failure to file a tax return)
b. Disallowance of tax deduction items
c. The omission of rental income that is greater than 25 %
of the taxpayer’s reported gross income
2. In reference to tax research, what is meant by the best
possible defensibly correct solution?

1.The profession of tax practice involves four principal
areas of activity. Discuss these four areas.
2. Many tax professionals have moved into the field of financial
planning for their clients.
a. How do taxes impact financial planning for a client?
b. Why do tax professionals have a perfect opportunity to
perform financial planning for their clients?

Tax Rates. Latesha, a single taxpayer, had the following
income and deductions for the tax year 2019:
a. Compute Laresha’s taxab le income and federal tax
liability for 2019 (round to dollars and ignore the qualified business income
deduction for chis problem).
b. Compute Laresha ‘s marginal, average, and effective tax
rates.
c. For tax planning purposes, which of the three rates in
Part b is the most important?