Mr. and Mrs. Worried, long time clients, have come to you for help. Their 13-year-old son has recently been expelled from the public junior high school because of severe behavioral problems, culminating in a physical attack on a teacher and threats of future violence. The son has been seeing a psychologist once a week but with no apparent positive results. The Worrieds would like to send their son to a private school that can provide the type of psychological help they believe he needs. The son's psychologist agrees that placement in a special school is imperative if there is ever to be a chance that the son will be a functioning member of society.
The Worrieds tell you that they are concerned because, although they have identified several potential schools, they do not have the financial resources necessary to pay the tuition and other additional costs. Their insurance does not cover any of the costs. However, the Worrieds believe that they may be able to afford the expenses if they can take them as a tax deduction. They ask you for your opinion.
a. Are there any additional questions you should ask the clients before you begin your research?
b. What additional potential sources of information might you want to ask for?
c. Which of the preceding facts are relevant? Which are irrelevant?
d. Is there a chance that you will need to ask more questions at a later point? Why or why not?
e. What is the first question you will try to answer in your research? Are there any additional issues that you can identify at this time?
f. What are the taxpayers' desired result? Why is this important? How does it affect your role as tax advisor?
g. Is this a planning research type of situation? How do you know?
h. Do you have an initial belief regarding the tax treatment in this circumstance?