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| Tax Research | | | Steven King | ACC 620M | July 26, 2011 | |

|

John R. Lane
1010 Ipsen St.
Yorba Linda, CA 90102

Dear Mr. Lane: It is my pleasure to be an accountant to help you calculate your tax return of last year, and thanks for giving this opportunity for me! You asked me to work out your tax return of last year based on your situation and your income, and expenses last year. In my opinion, I think this is a simple case so that we just need to fill the form 1040. In reaching this conclusion, I consulted relevant provisions of the Internal Revenue Code (“IRC”), and applicable Treasury Regulations under the IRC. The facts as I understand them are as follows: you are a single taxpayer, and provided 100% of the support of your cousin. In addition, you want to take advantage of the presidential election campaign check-ff. Your also gave me some relevant information, such as salary, taxable pension, interest income, IRA deduction, and withholding. Since you have already filled out the Schedule A, the itemized deduction can be used directly. Therefore, in your case, we just need to put those numbers into the proper line of the form 1040 simply. First of all, we can check the Presidential Election Campaign on the top right of this form because you want to take the advantage of it. For the income section, we just put $20,000 into line7, which is your salary, $300 into line 8a, which is the taxable interest, and $31,000 into the 16b, which is your pension. Then we can have the total income of your last year, which is $51,000. Second, we should work out your adjusted gross income. In this part, we just need to put $5,000 into line 32, because you just have IRA deduction in this part. Therefore, the adjusted gross income of you is $46,300. Third, in the next part, Tax and Credit, besides put the adjusted gross income into line

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