Hello I need help with a tax research. The attached document contains the question and the instruction on how to do the tax research.

I. Title: Requisite Tax Research II. Introduction: In this learning demonstration, you work for one of the four largest multinational accounting and auditing firms. Your professional goal is to become a senior partner of the firm someday. To achieve this goal, you plan to work in each department of the firm for at least one year. Your current position is in the taxation department, where you will conduct tax research. This hypothetical tax case has one (1) main activity: ! Conducting tax research Throughout this learning demonstration, your professor will play the role of a senior partner in the taxation department with whom you discuss various issues and submit draft documents for approval in advance of communicating with clients. To successfully complete this Learning Demonstration, you must demonstrate your knowledge of and abilities to complete the following goals and competencies: Goal 1: Communication: Learners demonstrate ability to communicate clearly both orally and in writing. o Competencies: ! 1.1 Organize document or presentation clearly in a manner that promotes understanding ! 1.2 Develop coherent paragraphs or points so that each is internally unified and so that each functions as part of the whole document or presentation ! 1.3 Provide sufficient, correctly cited support that substantiates the writer's ideas ! 1.4 Tailor communications to the audience ! 1.5 Use sentence structure appropriate to the task, message and audience ! 1.6 Follow conventions of Standard Written English Goal 2: Critical Thinking: Learners demonstrate ability to apply logical, systematic decision-making processes to formulate clear, defensible ideas and to draw ethical conclusions. o Competencies: ! 2.1 Articulate and frame the issue ! 2.2 Collect and evaluate information ! 2.3 Evaluate the underlying causes or conditions of elements contributing to an issue ! 2.4 Use systems thinking to arrive at a decision in the context of an issue 1 ! 2.5 Apply ethical principles when determining actions. Goal 3: Quantitative Reasoning: Learners demonstrate the ability to use mathematical operations and analytical concepts and operations to address problems and to inform decision-making o Competency ! 3.1 Construct models that represent real-world problems or processes ! 3.2 Develop visible representation of data ! 3.3 Analyze data using mathematical/algebraic operations ! 3.4 Use calculated results to inform the problem or process Goal 4: Leadership, Facilitation, and Collaboration: Learners lead, facilitate, and collaborate with a variety of individuals and diverse teams to achieve organizational objectives. o Competency ! 4.1 Demonstrate an ability to plan a particular objective or goal Goal 9: Functional Competencies for Federal Taxation: Learners demonstrate an applied understanding of U.S. federal income tax laws for individuals and business entities used in the professions and in accordance with U.S. Internal Revenue Code. ! Competencies: o 9.1 Legal and regulatory: Students demonstrate a general understanding of the Internal Revenue Code. o 9.4 Decision Making: Apply tax laws, regulations, and court cases to individual situations, identifying and communicating planning opportunities and compliance needs. o 9.5 Communication: Effectively communicate relevant tax information based on specific reporting requirements of the U.S. Internal Revenue Service or other U.S. taxing authorities in U.S. commonwealths and territories. As the newest member on the tax department team, the senior partner assigns you to conduct tax research for Jerome Horowitz (nickname: Jerry), a client who has been with the firm for many years. You will need to research various tax issues the client confronts given activities that occurred over the past 5 years. Unfortunately, the firm does not have copies of Jerry Horowitz's tax documents from prior years. Jerry Horowitz, is a divorced man, decided to take the plunge and get married one more time. Before he tied the knot this time, he wanted to protect his personal assets and individual wealth. Jerry was hesitant to bring up the subject of a prenuptial agreement to his fiance Debra Francois (nickname: Debbie). To sweeten the upcoming awkward discussion, he surprised Debbie by having roses delivered to her office one Friday afternoon. Debbie was gleeful the rest of the workday as her co-workers admired and made jovial comments about her marrying the best catch in town; Jerry was handsome, from a wealthy family, and known for his daredevil bungee jumping hobby. Rumor has it that Jerry has made millions working for JPM Real Estate Company. After work, Jerry took her to dinner at one of the finest restaurants downtown. 2 Knowing the Internal Revenue Service (IRS) has audited Debbie multiple times; Jerry hired a tax attorney to write the prenuptial agreement. Aaron Levine, Esq. was highly respected in the community and had the reputation of being the best tax attorney around. Levine prepared an equitable and fair prenuptial agreement to protect the respective assets of both Jerry and Debbie in the case of divorce or death. Jerry was substantially older than Debbie and was most concerned about leaving all real property to his grown children upon his death. Debbie would receive the proceeds from a one million dollar life insurance policy if Jerry passed away first. After cocktails and dinner, Jerry garnered the courage to discuss the prenuptial agreement with Debbie. Fortunately, Debbie was a fair-minded woman and completely understood that her past dealings with the IRS could be an issue moving forward. Both Jerry and Debbie agreed they wanted to use the \"married filing joint\" status on their future income tax returns. She was glad Jerry had taken care of having Levine prepare the prenuptial agreement, which she agreed to sign at Levine's office that night. On December 31, 20X5, Jerry and Debbie had a fabulous wedding ceremony overlooking the turquoise waters of the Caribbean. They took a honeymoon by cruising from St. Thomas, in the U.S. Virgin Islands to Jamaica and back on a 95-foot sloop. The weather, food, and crew provided a dream come true honeymoon. Debbie was ecstatic! Before marrying Jerry, Debbie had been married to an outside salesperson named Donald Draper; they had two children, Sally and Sam. He pushed the envelope a little too far when it came to deducting the entertainment and travel costs associated with his job. Draper did not keep accurate records or save receipts associated with business travel expenses. Like Debbie, he too had trouble with the IRS. Specifically, the IRS claimed that Donald was not keeping accurate business or tax records and even more incriminating, he was fabricating travel and entertainment expenses. Since Donald and Debbie selected the \"married filing jointly\" status on their 20X1 and 20X2 tax returns, the IRS indicted both Donald and Debbie on criminal tax fraud. Debbie was unaware that Donald was fabricating expenses on their jointly filed tax return. Unfortunately, the new bride continued to be under investigation by the IRS even after her tropical honeymoon. Imagine the surprised look on Debbie's face when Jerry received a letter from the IRS dated January 8, 20X5, stating the IRS is auditing him for tax years 1989 and 1999. Unaware he too had IRS problems, Debbie felt even more relieved she had signed the prenuptial agreement. Jerry manages JPM Real Estate Company, Inc. where he earns a very nice salary, which he reported on his personal income tax return. Sometimes, Jerry sold a few properties as an independent real estate agent. When he remembered, he reported these commissioned earnings on Schedule C of his tax return. The IRS letter asserted that Jerry understated his gross income 26% and 31% for the 1989 and 1999 tax years respectively. Jerry always had a passion for jumping off high objects since he was a toddler, thus it was no surprise when he started a bungee jumping business about 5 years ago, which he named Jerry's Jiant Jumps Company. He never filed any official paperwork for the company since it started out as a hobby. Given his upcoming audit, Jerry decided to clean up as much of his sloppy business practices as possible. Therefore, he began the online application process for an IRS Employer Identification Number (EIN). The application 3 required the business address: 1858 Bungee Drop Lane, Terrapin Falls, MD 20783 and Jerry's social security number 100-00-0001. Jerry did not intend to put Debbie's name or social security number 100-00-0002, on the application since he owned 100% of the company. Jerry was certain he was using a cash basis accounting method but unsure of which business form to select on the EIN application, so he could not finalize the EIN application process. Wisely, Jerry decided it was time for an accountant's perspective. At the beginning of February, Jerry came to the CPA firm with a box of tax documents and a list of questions. Jerry's previous accountant had retired from the firm, so it was no surprise when a senior partner introduced the two of you and assigned you as Jerry's new accountant. In your role as Jerry's accountant, your first step is to conduct tax research to answer all of his questions and provide Jerry with much needed guidance regarding his upcoming audit. III. Steps to Completion Conduct Tax Research: To begin, you should review the Tax Research Tutorial (http://businesslibrary.uflib.ufl.edu/taxresearch), and read the process to conduct tax research as described in the IRS document: REVIEW OF TAX RESEARCH MATERIALS (http://www.irs.gov/pub/irs-tege/eotopich87.pdf). You may also find the Georgetown University Law Library Tax Research-Federal Guide to be helpful in learning more about federal taxation research: http://www.law.georgetown.edu/library/research/guides/federal_tax.cfm. Other useful sites include: FindLaw.com and CornellLaw.com. There are three types of primary authoritative documents: 1. Statutory a. Internal Revenue Code b. Tax legislative process 2. Administrative a. Treasury regulations b. Revenue rulings c. Revenue procedures d. Private letter rulings e. General counsel memorandums f. Internal revenue manual 3. Judicial. a. Tax court b. U.S. District Court c. U.S. Claims Court d. U.S. Circuit Court of Appeals e. U.S. Court of Appeals for the Federal Circuit f. U.S. Supreme Court g. Actions on decisions To the extent possible, please support your research with appropriate legal citations that refer to primary authority as shown in the list above. If you cannot find primary authority 4 to support your research, then it may be necessary to refer to secondary authority. Secondary authority would include tax reference services, journal articles, and textbooks. Once you feel confident you understand how to conduct tax research and correctly cite the authoritative sources, research with the following topics. 1. Entity Type: Review business formation literature to gain a better understanding of the advantages and disadvantages of sole proprietorships and corporations. Prepare a tax research memorandum and be prepared to defend your decision for a meeting you plan to have with the senior partner. State the issues and the rules of law regarding each issue using the Issue, Rule, Application, and Conclusion method, commonly referred to as the IRAC Method. If needed, review resources on the IRAC Method to prepare this tax research memorandum. Assume Jerry accepted your recommendation and completed the online IRS EIN application process. The IRS issued Jerry's Jiant Jumps Company EIN: 96123456789 with a Business Code of 713900. 2. Joint liability: Research relevant tax literature to determine if Debbie will be liable for Jerry's tax liabilities. Prepare a tax research memorandum regarding which years she may or may not be liable. Also are there any code sections that Debbie may be able to use to protect her self from being responsible. State the issues and the rules of law regarding each issue using the Issue, Rule, Application, and Conclusion method, commonly referred to as the IRAC Method. If needed, review resources on the IRAC Method to prepare this tax research memorandum. 3. Business vs. Hobby: Review the Internal Revenue Code rules on operating a business versus a hobby to determine whether Jerry's Jiant Jumps is a business or a hobby. Prepare a tax research memorandum regarding business vs. hobby rules and be prepared to defend your decision for a meeting you plan to have with the senior partner. State the issues and the rules of law regarding each issue using the Issue, Rule, Application, and Conclusion method, commonly referred to as the IRAC Method. If needed, review resources on the IRAC Method to prepare this tax research memorandum. 4. Employee vs. Independent Contractor: Research IRS regulations related to employees versus independent contractors. Prepare a tax research memorandum regarding employee vs. independent contractor regulations and be prepared to defend your decision for a meeting you plan to have with the senior partner. State the issues and the rules of law regarding each issue using the Issue, Rule, Application, and Conclusion 5 method, commonly referred to as the IRAC Method. If needed, review resources on the IRAC Method to prepare this tax research memorandum. 5. Statute of Limitations: Research and exlain statute of liminations related to tax issues. Prepare a tax research memorandum regarding statute of limitation laws and be prepared to explain differnt statute of limitations for a meeting you plan to have with the senior partner. State the issues and the rules of law regarding each issue using the Issue, Rule, Application, and Conclusion method, commonly referred to as the IRAC Method. If needed, review resources on the IRAC Method to prepare this tax research memorandum. 6. Income or Not?: Jerry was injured and he is now in the process of negotiating the settlement. He is wondering what is the differnce between compensatory or punitive damages. Prepare a tax research memorandum regarding punitive and compensatory damages as taxable income or not and be prepared to defend your decision for a meeting you plan to have with the senior partner. State the issues and the rules of law regarding each issue using the Issue, Rule, Application, and Conclusion method, commonly referred to as the IRAC Method. If needed, review resources on the IRAC Method to prepare this tax research memorandum. Now that you have completed conducting tax research to answer Jerry's and Debbie's questions and provide them with research-based recommendations, it is time to prepare the deliverables. IV. Deliverables Format: You will combine all research files into one PDF document. If you are unfamiliar with combining multiple documents to create one PDF file, the following site explains how using 16 different methods: http://www.wikihow.com/Merge-PDF-Files. Naming convention: Name the PDF file using the following convention: FirstName_LastName_TaxResearch.pdf LEO Assignment folder: Submit the PDF document in your LEO assignment folder. (Continue to next page) 6 7