Objectives

Performing tax research to find correct answers to a given tax situation and composing memorandums summarizing these findings are important parts of tax practice. As outlined in Chapter 2 of your text, there are several authoritative primary tax law sources. The first, the Internal Revenue Code, is the law enacted by Congress. The Treasury Department and the Internal Revenue Service publish a number of materials that interpret and provide decisions, pronouncing their interpretation and application of the Code, including treasury regulations, revenue rulings, and revenue procedures. Finally, courts are often asked to hear tax disputes between taxpayers and the United States, and these courts issue rulings that interpret and apply the tax law, creating additional tax authority in the process. These combined writings constitute primary tax law authority, and these are the authorities that tax practitioners rely upon when a client asks for their opinions regarding how a proposed or a completed transaction should be treated for tax purposes.

In this project, you will be presented with two tax research problems and asked to answer the questions pertaining to the facts presented in each Fact Pack:

• Kenny's Fact Pack
• Blough's Fact Pack

For both Fact Pacts, you will need to:

• Read and analyze these authorities,
• Apply their holdings to the facts you are given,
• Conclude how the transaction you are given should be treated for tax purposes.

In Kenny's Fact Pack, you are asked to:

• Discuss the facts,
• Identify and discuss the issues, and
• Provide a thorough analysis, based on the factspresented.

In Blough'sFact Pack, you are asked to:

• Include tax implications,
• State importance of the Cheryl Werffsummary opinion, and
• Provide recommendations.

Each research problemis worth 50 points (Total = 100 points)

In addition to these two factpacks, you will be presented with a computational exercise having three distinct requirements embedded in this exercise. This portion of the Week 6 Project is worth 40 points.

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Guidelines

Your instructor will share the information for the different scenarios for this assignment. The beginning of the assignment contains an extensive explanation of the project, as well as guidelines that must be followed in completing the project.You are responsible for knowing and following these guidelines. Some of the more significant guidelines include the following.

• Submit a separate document for each of the three portions of the assignment. They are:Kenny's Fact Pack
• Blough's Fact Pack
• Computational Exercise
• Your submissions must be completed in Microsoft Word.
• You must use a reasonably easy-to-read font, such as Times New Roman or Arial, in at least 12-point font size. Each page must have at least a one-inch margin on all sides and be double spaced.
• Appropriate citations are required.
• The tax memorandums must be in traditional tax memorandum format, as outlined in Chapter 2 of your text. The research essay should be in traditional essay format, including a cover page and a citation page.
• All DeVry University policies are in effect, including the plagiarism policy.
• Papers are due at the end of Week 6 of the course.
• General questions about this paper may be discussed in the weekly Q & A discussion topic. If they are specific or substantive in nature, such as questions concerning the analysis of one or more of the materials provided, please e-mail such questions to your instructor.
• This project is worth 140 points. You will be graded on the overall quality of your submission, including the quality of your analysis and the professionalism of your submission. Details concerning the grading criteria follow.

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Milestones

This project is worth a substantial portion of your grade (140 points), and will appropriately take a substantial amount of time to complete. At a minimum, you should begin working on the project in Week 3 to give yourself ample time to complete and submit it in Week 6. Doing so will ensure that you have sufficient time to contact your instructor with any questions that you have or any problems that you encounter in completing the project.

Week 2:Review theResearch Questionsdocument to complete this assignment.

Week 3:Start reading the Tax File Memo document and begin compiling your responses in preparation for the final submission in Week 6.

Your response to the questions should include:

• Tax implications,
• Importance of Cheryl L. Werff Summary Opinion, and
• Recommendations.

Week 6:Submit your final assignment, consisting of three separate files:Kenny's Fact Pack, Blough's Fact Pack, and the Computational Exercise.

The Grading Rubric, shown below,gives an excellent summary of each area that the student must cover.

TAX PROJECT

As indicated, this project has three separate deliverables due at the end of Week 6. The details of the project are providedhere.

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Grading Rubrics

Research Problem: One

(Tax File Memo: 50 points)

CategoryPoints

DescriptionFact Section5

Accuracy in stating and summarizing the relevant facts; professionalism of submission (e.g., grammar and punctuation); clarity of writing and expressionIssue Section10

Accuracy of identification of the relevant issue; clarity and succinctness of the expression of the issue; professionalism of submissionAnalysis & Discussion

30

Accuracy and thoroughnessof analysis, discussion and interpretation of relevant or provided authorities; determination of applicable rules; application of rules to the facts of the case

Citations5

Providing in-textcitations; reference list corresponding with the in-text citations.Total50

A quality paper will meet or exceed all of the above requirements.

Research Problem: Two

CategoryPoints

DescriptionTax Implications of Listed Transactions15

Ability to search for and find relevant materialsImportance of Summary Opinion (Cheryl Werff)

15

Analysis of these different materials, including discussion of the materials in the context of the tax law or tax policy; analysis of the materials in light of the question(s) posed; clarity of expression of your conclusions and analysisRecommendations & Advice

15

Application of the materials and your analysis to reach one or more conclusions presented by the essay, if applicableCitations for Supporting Section

5

The overall appearance and professionalism of your paper, including grammar, punctuation, formatting, and quality of communicationTotal50

A quality paper will meet or exceed all of the above requirements.Computational ExercisePointsTax Argument:

Imputed & Market Interest

12

The student must demonstrate a clear understanding of the issues relating to the tax implication on interest; must provide a definition and meaning of imputed interest and market interestTax Argument:

Loans Between Individuals

12

The student must demonstrate a clear understanding of the issues relating to the tax implication on loans between individuals, and the importance of these requirements, specific to this case, and within the wider context.Tax Argument:

Tax Recognition on Interest Income

12The student should demonstrate a clear understanding of the issues relating to the tax implications on interest income specific to this case, and general in nature.Citations & Supporting Section4A quality paper will meet or exceed all of the above requirements.Total40

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Best Practices

As with any assignment, there are certain best practices that you can follow to ensure success. Tax research memorandums use a fairly standard format and structure that is different from your typical essay assignment. The four parts include the following.

1. Facts:In this section, you summarize the facts about the transaction or events that are relevant and material to the tax questions being asked. Frame them as precisely and succinctly as possible, and write them so that they can be understood by someone who has no knowledge of the underlying facts.
2. Question Presented or Issue:This is a succinct (usually one-sentence) question that you are trying to answer or resolve in the memorandum.
3. Short Answer:This is a succinct (usually one- or two-sentence) answer to the question presented.
4. Analysis:True to its title, this section contains all of the substantive analysis that you needed to perform in order to come to the short answer to the question presented. It discusses, in logical order, the various tax authorities to establish the tax rule or rules that apply to the fact pattern given. This includes such efforts as an analysis of the facts of these other cases and the language of the applicable Code section(s) at issue. Once the rules are established, it then applies those rules to the facts in the case in order to reach the conclusion that is summarized in the short answer.

As you write this memorandum, keep in mind that it should be self contained and self explanatory. Someone who does not have any outside understanding of the events or circumstances or of the tax law should be able to pick up your memorandum, read it, and understand the facts of the case, your conclusion, and how you reached your conclusion, including the authorities upon which you relied to reach that conclusion. If, in your assessment, a third party could not do that, then your memorandum does not contain all of the required information.

The Research Essay should be completed using a conventional essay format. A thorough submission should consider including all of the following elements.

• Cover Page:Include who you prepared the paper for, who prepared it, and the date.
• Table of Contents:List the main ideas and section of your paper and the pages in which they are located. The illustrations should be included separately.
• Introduction:Use a header on your paper. This will indicate that you are introducing your paper. As you know, the purpose of an introduction is threefold:
• to introduce the subject and why the subject is important;
• to preview the main ideas and the order in which they will be covered; and
• to establish the document's tone.
• Include in the introduction a reason for the audience to read the paper. Also, include an overview of what you are going to cover in your paper and the importance of the material. (This should include or introduce the questions that you are asked to answer on each assignment.)
• Body of Your Report:Use a header titled with the name of your project. Example: The Development of Hotel XA World Class Resort. Then, proceed to break out the main ideas. State the main ideas, state major points in each idea, and provide evidence. Break out each main idea that you will use in the body of your paper. Show some type of division like separate sections that are labeled, separate groups of paragraphs, or headers. Include the information that you found during your research and investigation.
• Summary and Conclusion:Summarizing is similar to paraphrasing but presents the gist of the material in fewer words than the original. An effective summary identifies the main ideas and major support points from the body of your report. Minor details are left out. Summarize the benefits of the ideas and how they affect the subject.
• Works Cited:Use the citation format as specified in the Syllabus.

Keep in mind that the best writers don't generally write accidentallythey plan. First, outline the points that you need to make in your paper or analysis. Next, prepare a draft based on that outline in which you flesh out your points and provide effective transitions between the points or sections of your outline. Finally, edit, edit, and edit some more until you have a tightly written, precise, and effective final product