...Federal Tax Law Effect on Individual Taxpayers Regarding Earned Income Tax Credit Federal Tax Law Effect on Individual Taxpayers Regarding Earned Income Tax Credit Jaree Chambers DeVry University / Keller Graduate School of Management Abstract Federal tax law effects each taxpayer differently and can prove difficult to interpret. The differences very due to income, family size or family situations i.e. single, married, divorced, childless, etc., and allowable credits or deductions. During our review of the Federal tax laws in this paper, we will briefly document how the United States taxation system developed and the effects of the earned income tax credit on taxpayers. While the earned income tax credit and the child tax credit came to be around the same time, we will focus on the earned income tax credit as it is our largest federal entitlement program. Federal Tax Law Effect on Individual Taxpayers Regarding Earned Income Tax Credit Taxation dates back to the United States Constitution empowering Congress to “lay and collect taxes, duties, imports and excises to pay the debts and provide for the common defense and general welfare of the United States.” Limitations were established limiting taxation as follows: “all duties, imports, and excises shall be uniform throughout the United States, that direct taxes should be laid in proportion to the population.” This language is key as many early tax laws were found to be unconstitutional due to these two simple terms:...
Words: 2417 - Pages: 10
...Name removed. GM 520- Week 2 Assignment Assignment: Pick an administrative agency of either the Federal or a State government. Find where the current and proposed regulation changes for that agency are located on the internet. (i.e. the Federal Register or the State Administrative Agency website.) Regulations.gov is a good place to begin your research. Pick one proposed regulation change currently under consideration (if you find one which has already closed out, but interests you, you can use that, instead) and write the following regarding it: 1. State the administrative agency which controls the regulation. Explain why this agency and your proposed regulation interests you (briefly). Will this proposed regulation affect you or the business in which you are working? If so, how? Submit a copy of the proposed regulation along with your responses to these five questions. The proposed regulation can be submitted as either a separate Word document (.doc) or Adobe file (.pdf). This means you will submit two attachments to the Week 2 Dropbox: (1) a Word doc with the questions and your answers and (2) a copy of the proposed regulation you used for this assignment. (10 points) 2. Describe the proposal/change. (10 points) 3. Write the public comment which you would submit to this proposal. If the proposed regulation deadline has already passed, write the comment you would have submitted. Explain briefly what you wish to accomplish with your comment. (10 points) 4. Provide the "deadline"...
Words: 21997 - Pages: 88
...Tax Return Position Paper When it comes to taxes and the Internal Revenue Service (IRS), it can be difficult to take any particular position on a tax return. There are so many different things that must be weighed out before making such a difficult decision. In order to take a firm position on a tax return one would first need to know the primary sources of tax law as well as the secondary sources of tax law. Secondly, there is also the need to know what substantial authority is and to have a clear and decisive understanding of the true meaning of it. Lastly, one needs to understand the role of the Internal Revenue Service and the courts in the aspect of applying tax law. Primary Sources There are multiple sources of tax law that are used. The largest primary source currently being used is the Internal Revenue Code. The Internal Revenue Code is actually part of the United States Code. Other primary sources of tax law consist of treasury regulations and federal regulations. Previous decisions made by the different courts systems (United States Tax Court, federal circuit courts, district courts, supreme court and court of federal claims) are widely used as primary sources of tax law. The previous rulings from the different court systems is a good sources because the information is more detailed and serves as a guideline for different taxpayer situations. The courts and Internal Revenue Code generally have the highest authority. However, there are also other sources...
Words: 743 - Pages: 3
...Economist Article The article “Guides through the swamp” (March 24, 2012) discusses newly imposed challenges in the already complicated world of the tax preparation industry. Last year the IRS introduced a new licensing and continuing education requirements for tax preparers. Unsurprisingly, big firms such H&R Block and TurboTax support the licensing and already set up in-house training programs. Additionally, IRS stepped up to regulate “refund anticipation payments,” which, in reality, were predatory loans with high interest rates. Both of these actions will negatively impact “mom and pop” small tax preparers, in form of higher cost of licensing and loss of additional interest income. The net result will be less competition, fewer jobs, and higher prices. In the end, consumers will have to pay for the costs associated with licensing and “continuing education,” or prepare takes on their own. This means more customers for giants H&R Block and TurboTax. Guides through the swamp A big shake-up for America’s tax-preparation industry Mar 24th 2012 | NEW YORK | from the print edition * * PAYING tax always hurts. But America’s tax code seems designed to make it hurt as much as possible. It contains 3.8m words, and was changed 579 times in 2010 alone. Taxpayers must wade through a swamp of gobbledygook: tax compliance consumes 6.1 billion man-hours annually, according to the Internal Revenue Service (IRS). That’s the equivalent of 3m people working full-time...
Words: 1098 - Pages: 5
...Part 1 William as a tax preparer may do a couple different moves with this sort of situation. When preparing a tax return, it is really important for the preparer to evaluate whether or not the authority or authorities are favorable or unfavorable in every situation. In this case, William is aloud to recommend a position on this tax research question for his client and try to avoid penalties if the most substantial authority supports the position. According to Tax Codes, Substantial authority suggests that the probability that the taxpayer’s position is sustained upon audit or litigation is in the 40-plus percent ranges or above. According to IRC SECTION 6694, the preparer who prepares any return or claims a refund with any understatement with knowledge will be penalized with respect to each return or claim. To be careful when dealing with what is substantial authority, the standard is used to determine whether a tax practitioner may take a tax return position without being subject to the penalty. Since William estimates that there is 48 percent chance that the position will be sustained, William can make this return without worrying about a penalty. The tax preparer does not have to disclose this information because it does have the necessary backing from the substantial authority. According to the same section, a taxpayer will not be subject to the underpayment penalty because there is a substantial authority that supports the tax return. Due to the stated facts, William...
Words: 355 - Pages: 2
...other than representation before the IRS. 1 Taxpayer information. Taxpayer must sign and date this form on page 2, line 7. Taxpayer name and address Identifying number / / Daytime telephone number hereby appoints the following representative(s) as attorney(s)-in-fact: 2 Representative(s) must sign and date this form on page 2, Part II. CAF No. PTIN Telephone No. Fax No. Check if new: Address CAF No. PTIN Telephone No. Fax No. Check if new: Address CAF No. PTIN Telephone No. Fax No. Check if new: Address to represent the taxpayer before the Internal Revenue Service for the following matters: 3 Matters Description of Matter (Income, Employment, Excise, Whistleblower, PLR, FOIA, Civil Penalty, etc.) (see the instructions for line 3) Tax Form Number (1040, 941, 720, etc.) (if applicable) Name and address Plan number (if applicable) Check if to be sent notices and communications Name and address Telephone No. Fax No. Check if to be sent notices and communications Name and address Telephone No. Fax No. Telephone No. Fax No. Year(s) or Period(s) (if applicable) (see the instructions for line 3) 4 5 Specific use not recorded on Centralized Authorization File (CAF). If the power of attorney is for a specific use not recorded on CAF, ▶ check this box. See the instructions for Line 4. Specific Uses Not Recorded on CAF . . . . . . . . . . . . . . Acts authorized. Unless otherwise provided below, the representatives generally are authorized to receive...
Words: 1274 - Pages: 6
...overseeing the US Tax Code The Internal Revenue Code IRC), formally the Internal Revenue Code of 1986, is the domestic portion of Federal statutory tax law in the United States. IRC was published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code (USC). The primary role of the federal tax code is to raise sufficient revenue to pay for government services, benefits, programs, and investments. I am in favor of a tax reform. I believe it is important to have a simplified, transparent tax code that eliminates hidden tax exemptions, credits and deductions that benefit only a few. By improving our tax code, we will be able to incentivize employers to start hiring while also reducing taxes for all. The US Congress needs to do a better job on the current tax code. First, the tax code needs to be more simplified for any American can read and understand it. After I review the current tax code I was more confused. Our current tax code should reflect our current economy. US Congress should not should our code based on who is in office but rather what is best for our economy. Since 1986, Congress has made 15,000 changes to the tax code. So simplifying the tax code, theoretically, would cut back on compliance costs and put more money into the pockets of ordinary taxpayers. Two Major Tax changes America’s tax code is broken and must be reformed. In the quarter century since the last comprehensive tax reform, Washington...
Words: 1097 - Pages: 5
...Tax accounting firms focus on the rules and regulations that the Internal Revenue Code mandates. These regulations are used to help individuals and companies to process in preparing their tax documents. Standard accounting methods differ from what tax methods are allowed to be used when preparing tax returns. These tax accounting firms focus on understanding by keeping up to date on the latest rules and codes to be used for international, federal, state and local tax laws when preparing yearly returns. To work as a tax accounting employee, most firms require an individual to hold a bachelor degree in accounting, some require a master’s degree in accounting or taxation. While working in this field, the individual will be able to file reports with United States Securities and Exchange Commission, and the tax return professional must hold a certificate showing they are a Certified Public Accountant by their states board. Some firms or businesses that focus on preparing tax returns offer their own tax courses for their employees and affiliates. To name a few job titles that you will find within this area of tax accounting firms will be: a tax accountant, senior tax accountant, tax manager, tax director, tax research manager, tax supervisor, certified income tax preparer (CTP), certified public accountant (CPA), or even a licensed tax consultant. International Financial Reporting Standards will greatly impact tax firm preparers. “It will be important for tax return preparers to understand...
Words: 358 - Pages: 2
...the organization in defining the potential and risks for a business. Acknowledging and acting on the potential or risks will also decide the future of an organization. H & R Block, Inc. faces several internal and external forces and trends that affect its business. The intent of this paper is to develop a synopsis of the forces, which affect H&R Block, how the company adapts to change, the supply chain of the company, and any issues or opportunities. Legal and regulatory practices are external forces, which are both a strength and weakness for H&R Block. The Internal Revenue Services (IRS) develops regulator factors that tax preparers must comply with. Recent developments include the elimination of the debt indicator information, which provides tax preparation firms and financial institution with advance notice if a taxpayer has any leans against his or her tax refund. The elimination of this tool will create a downfall for both the lenders and individuals. The elimination of this tool will hinder the lenders, as they will not be able to determine the client’s worthiness, resulting in lower approval rates, and a higher credit risk, and increase in cost for most taxpayers. Additionally, the IRS will not provide taxpayers with direct concurrent debt information in which they are entitled to, as a right of his or her information (IRS, 2010). Eliminating this tool does not mean eliminate the individual’s demand for financial products. However, most consumers will not learn of the...
Words: 1421 - Pages: 6
...complete the training contained in this document Tax Preparers, Quality Reviewers, Greeters/Screeners and Site Leaders all complete some in-person training, which already includes VSC. These volunteers do not need to complete the training in this document, unless otherwise instructed by a Ladder Up staff member or trainer. • 1 WHAT ARE THE STEPS TO COMPLETE VSC? If you’ve determined you need to complete VSC in this format, please do the following: 1. 2. Read the material on the next several pages. Answer the questions on pages 8-9 and email your answers to volunteers@goladderup.org. Include in your email: • • • Your first and last name, as listed in your volunteer profile on our website The answers (in order) to the 5 questions on the exam The date and TAP site of your first volunteer session, if you have scheduled it 3. Turn in your signed Volunteer Agreement (Form 13615) to the Site Leader at your first TAP session. • • You can find the agreement on the Volunteer Resources page on our website, or print one out at the TAP site on your first day. The form will be available for printing on each of the laptops. Your Site Leader will return your agreement and indicate he/she has verified your photo ID to the Ladder Up office. That’s it! Let’s get started! 2 Volunteer Standards of Conduct Last update: January 13, 2012 VOLUNTEER STANDARDS OF CONDUCT Last year, the Treasury Inspector General for Tax Administration (TIGTA) and IRS Stakeholder Partnerships...
Words: 1141 - Pages: 5
...Liberty Tax Service S.W.O.T Analysis By: Lorne Wright Term: Winter Professor: Fairbrother Introduction Liberty Tax Service is a United States based business that specialize in the preparation of tax returns for both individuals and businesses. It originated in Canada in September 1997, when the Chief Executive Officer (CEO) John Hewitt acquired a Canadian tax franchisor, U& R Tax Depot. In 1998, the company became known as Liberty Tax Service and opened five offices in the U.S. The founder and CEO, Hewitt is nationally recognized within the tax industry. He is considered a veteran for his forty-four tax seasons of experience, founder of two top tax preparation firms, and for being a former regional director of H&R Block. His experience and prestige’s background landed him as one of the accounting profession’s top 100 most influential people eleven times. Strength Liberty Tax Service has several strengths. The major strength that this organization has is that it has a wide forum of accounting professionals. These accounting professional includes certified public accounting (CPA), chief financial officers (CFO), accounting students and community residents who have completed the liberty tax course. This enables liberty to serve all the members of the community effectively due to its professionally adequate structure of individuals. The ability to have all these professionals makes the organization look more attractive to the clients. This organization...
Words: 1778 - Pages: 8
...litigated in the case in question using the tax research steps outlined in Appendix A of your text. * Compare the American Institute of CPAs’ (AICPA) Statements on Tax Standards (SSTS) and the Treasury Department Circular 230 rules to practice before the Internal Revenue Service (IRS). Suggest which document creates better guidance in the preparation of tax returns and written advice provided to taxpayers. From the e-Activity, evaluate the importance of the principal issue litigated in the case in question using the tax research steps outlined in Appendix A of your text. Determine the Facts: The respondent, Marshall R. Jones, determined deficiencies in Alacare Home Health Services Federal income tax of $136,895 for 1995 and $58,726 for 1996 and accuracy-related penalties under section 6662(a) of $27,379 for 1995 and $11,745 for 1996. Identify the issues: As a Medicare-certified home health care agency, Alacare must comply with accounting guidelines contained in the Medicare Provider Reimbursement Manual Publication. The respondent determined that Alacare’s policy of expensing assets that cost less than $500 was not a proper method of accounting, and that Alacare must capitalize the cost of the disputed assets over their useful lives. Locate applicable authorities: Medicare Provider Reimbursement Manual (HCFA Publication 15-1): Guidelines for Capitalization of Historical Costs and Improvements Costs of Depreciable Assets. Income Tax Regulations: SEC 446(a) General Rule...
Words: 989 - Pages: 4
...Assignment William has made an estimation that if his client takes a more favorable position on the tax return then there is a forty eight percent chance that the client's position will be sustained upon audit or judicial proceeding. As a professional tax preparer William should have some sort of supporting documentation which would have led him to come up with the forty eight percent chance. According to the AICPA's Interpretation No. 1-1, "Reporting And Disclosure Standards" from October 20, 2011 the forty eight percent would fall into the Substantial Authority Standard. "he substantial authority standard is an objective standard and is satisfied if the weight of the authorities supporting the position is substantial in relation to the weight of authorities supporting a contrary treatment. In practice, the substantial authority standard generally is interpreted as requiring approximately a 40 percent likelihood that the position will be upheld on its merits if it is challenged." According to Internal Revenue Code Section 6694(a)(2) (A) "Except as otherwise provided in this paragraph, a position is described in this paragraph unless there is or was substantial authority for the position." Since William estimated a forty eight percent likelihood then he is well within the Substantial Authority category and will not receive a penalty for signing the return as a tax preparer. In this case the taxpayer does not have to make a disclosure since there is substantial authority and...
Words: 440 - Pages: 2
...Revenue Service Compliance Requirements for CPAs Go to the IRS Website and review circular 230 titled “Regulations Governing Practice before the Internal Revenue Service,” located at http://www.irs.gov/pub/irs-pdf/pcir230.pdf. Write a three to four (3-4) page paper in which you: 1. Create an argument supporting the following premise: The requirements of Circular 230, as well as the consequences related to violations of the compliance rules for individual or corporate taxes, have reduced tax fraud activity. 2. Suggest what you believe to be the most flagrant ways in which tax preparers violate IRS Circular 230 rules, and provide a rationale for your response. Propose the most likely IRS penalty for the violation identified, and recommend the most important alternative action(s) that the IRS could take to prevent this type of violation in the future. 3. Evaluate the current Circular 230 requirements to practice before IRS, and recommend at least two (2) new requirements for tax practitioners that would improve overall ethical behavior and compliance and avoid IRS penalties. Support your recommendation with examples. 1. Activity mode aims to provide quality study notes and tutorials to the students of ACC 575 WK 3 Assignment 1 in order to ace their studies. ACC 575 WK 3 ASSIGNMENT 1 To purchase this visit here: http://www.activitymode.com/product/acc-575-wk-3-assignment-1/ Contact us at: SUPPORT@ACTIVITYMODE.COM ACC 575 WK 3 ASSIGNMENT 1 ACC 575 WK 3 Assignment...
Words: 993 - Pages: 4
...1) Which of the following (according to Charles Fombrum) is not one of the four determinants that influence a company's reputation? a. Credibility. b. Reliability. c. Profitability. d. Responsibility. 2) The 5 E's of the accounting profession in Texas are Ethics, Enthusiasm, Education, Examination and Experience. a. True b. False 3) The P in CPA stands for Public? a. True b. False 4) The difference between what the public thinks it is getting in audited financial statements and what the public is actually getting is known as: a. Credibility gap b. Expectations gap c. Audit gap d. Stewardship gap e. None of the above 5) Which of the following is not a trend described in Chapter 1 as having an impact on the ethics of business? a. Directors’ legal liability b. Management’s stated intention to protect reputation c. Auditors’ legal liability d. Management’s assertions to shareholders on the adequacy of internal controls e. Management’s stated intention to manage risk 6) Which corporate report discusses subjects that include environmental, health and safety, philanthropic and other social impacts? a. Corporate annual report b. Corporate social responsibility report c. Corporate quarterly report d. Corporate stakeholder report e. Corporate ethics committee report 7) The goal of the State Board of Public Accounting is...
Words: 5506 - Pages: 23
