Electronic contracts are founded on the principles of common law. Yet, there are areas where new principles have been formulated, both at international and domestic levels. In not more than seven pages, examine electronic contracts by clearly outlining international and domestic laws guiding them.

REQUIREMENTS (1) Select one of the following problems: Search in the library or Website for the related taxation regulations: 1. Describe and explain your understanding of the problem. 2. Give an opinion and comments on the problem and use regulations to support your points of view. 3. Cite the regulations which are relevant to the problems. 4. Finish the research paper with your conclusion. 5. Research Problem 1. Don and Mary Dewey are successful professionals who have a combined AGI of approximately $400,000. Their household includes two children: Debra (age 16) and Van (age 23). Van is not a student but works at a part-time job where he earns $16,000. Don has heard that it might be beneficial if Van, rather than Don and Mary, claims Debra as a qualified child for income tax purposes. At a local Chamber of Commerce meeting, he asks you to advise him on this matter. Send a letter to Don at 4321 Mount Vernon Road, Dover, DE 19901, advising him about the advantages of such a choice and whether it is feasible. In your letter, discuss the relevance of Code 24, 32, 151, and 152. (Chapter 3) Research Problem 2. John and Janet Baker are husband and wife and maintain a household in which the following persons live: Calvin and Florence Carter and Darin, Andrea, and Morgan Baker. 1 > Calvin and Florence are Janet's parents, who are retired. During the year, they receive $19,000 in nontaxable funds (e.g., disability income, interest on municipal bonds, and Social Security benefits). Of this amount, $8,000 is spent equally between them for clothing, transportation, and recreation (e.g., vacation) and the balance of $11,000 is invested in tax-exempt securities. Janet paid $1,000 for her mother's dental work and paid the $1,200 premium on an insurance policy her father owned on his own life. Calvin also had medical expenses, but he insisted on paying for them with his own funds. > Darin is the Bakers' 18-year-old son who is not a student but operates a pool-cleaning service on a part-time basis. During the year, he earns $14,000 from the business, which he places in a savings account for later college expenses. > Andrea is the Bakers' 19-year-old daughter who does not work or go to school. Tired of the inconvenience of borrowing and sharing the family car, during the year, she purchased a Camaro for $21,000. Andrea used funds from a savings account she had established several years ago with an inheritance from her paternal grandfather. > Morgan is the Bakers' 23-year-old daughter. To attend graduate school at a local university, she applied for and obtained a student loan of $20,000. She uses the full amount to pay her college tuition. The Bakers' fair rental value of their residence, including utilities, is $14,000, while their total food expense for the household is $10,500. a. How many dependency exemptions will the Bakers be entitled to claim for the year? Explain your answer. b. From a planning standpoint, how might the Bakers have improved the tax result? Partial list of research aids: Reg. 1.152-1(a) and -1(c). Your Federal Income Tax (IRS Pub. 17), (Ch. 3.) Research Problem 3. Gray Chemical Company manufactured pesticides that were toxic. Over the course of several years, the toxic waste contaminated the air and water around the company's plant. Several employees suffered toxic poisoning, and the Environmental Protection Agency cited the company for violations. In court, the judge found Gray guilty and imposed fines of $15 million. The company voluntarily set up a charitable fund for the purpose of bettering the environment and funded it with $8 million. The company incurred legal expenses in setting up the foundation and defending itself in court. The court reduced the fine from $15 million to $7 million. Gray Chemical Company deducted the $8 million paid to the foundation and the legal expenses incurred. The IRS disallowed both deductions on the grounds that the payment was, in fact, a fine and in violation of public policy. Gray's president, Ted Jones, has contacted you regarding the deductibility of the $7 million fine, the $8 million payment to the foundation, and the legal fees. Write a letter to Mr. Jones that contains your advice and prepare a memo for the tax files. Gray's address is 200 Lincoln Center, Omaha, NE 68182. Partial list of research aids: 162(a) and (f). Reg. $ 1.162-21(b). (Chapter 6)