Ac553- Week 4 You Decide - You Are a Cpa with an Office in Nearlakes City and Clients Consisting Primarily...

MEMORANDUM TO: hindquarters metalworker, Esq FROM: XXXXX Date: August 5, 2012 SUBJECT: Recommendations for whoremaster and Jane smith assess concerns After reviewing the introduces that were of concern in regards to John and Jane smith taxes, I would like to address them and offer recommendations that will be beneficial in reducing their tax liabilities. The issues that are turn to are listed below: 1. John Smiths tax Issues: 1(a). How is the $300,000 treated for purposes of national tax income? The $300,000 real by Mr. Smith was fees and is treated as realize income; therefor it is ratable and is subjected to federal official income tax. IRC Code Section 61 (a) defines gross income as income from some(prenominal)(prenominal) stem derived, including (but non limited to) requital for services, including fees, commissions, fringe benefits, and similar items. I.R.C. § 61(a)(1). Courts consistently train upheld the determination tha t wages ruin at heart portion 61(a)(1)s definition of compensation and, accordingly, constitute assessable income. Mr. Smith would have to pay these taxes in a apropos manner. The law states that if the amount was not paid for on bandaging taxes, he would also be confront with a latterly payment penalty.

The Sixteenth Amendment to the Constitution, ratified in 1913, provides that Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. In United States v. Connor, 898 F.2d. at 943, the trio Ci rcuit noted that every court which has ever! considered the issue has unequivocally rejected the argument that wages are not income. All income received by a taxpayer is income under section 61 unless it is specifically exempted or excluded. http://www.irs.gov/pub/irs-drop/rr-07-19.pdf 1(b). How is the $25,000 treated for purposes of Federal tax income? The $25,000 that was paid up front for expenses originally were not taxable and should...If you want to get a full essay, send it on our website: BestEssayCheap.com

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