You and your friend Charles study accounting. Your friend states accounting transactions and transaction taxes are similar. Do you agree? Why or why not?

Compare and contrast the primary purpose of the generally accepted accounting principles (GAAP) with the accounting principles of the U.S. Department of Treasury. Is it important to understand the difference to tax planners? Why or why not?

You get a good salary. However, a major part of your salary goes into tax. You are constantly exploring ways to lower your taxes. Your friend Charles suggested that you can lower your overall taxes simply by moving to another state.

Which states would you be considering? Why? What are the options available in your chosen state to lower your taxes?

Does this hold true for corporations? Why or why not?

Charles says that the IRS institutes statues of limitations just like criminal law. You tell him these statues apply only to the taxpayer, whereas criminal statutes of limitations apply to the government. Who is correct? Explain.

One day Charles comes to you for advice. He informs you he has just received a notice from the IRS saying a tax return he filed six year ago is being audited. He argues the statute of limitation has expired.

Can the IRS audit Charles's six-year-old tax return? Why or why not?

You and Charles visit a sports bar and overhear a discussion concerning the constitutionality of federal income taxes. One person says the constitution prohibits imposing federal income taxes.

Do you agree with this statement? Why or why not?

There was a time in America when people did not pay federal income taxes. What changed this situation?

Select the Best Tax Issue

Cindy, an accountant for a large accounting firm, works ten-hour days. As a requirement for her job, she must attend social events to recruit new clients. In addition to her job with the accounting firm, she also has provided for clients in her unincorporated professional practice. Cindy purchased exercise equipment for $5,000. She works out on the equipment to maintain her stamina and good healthy that enable her to carry such a heavy workload. What tax issues should Cindy consider? Explain.