Case 1
a. The ethical issues for this case would be whether or not Billy Joe Carter should claim business deductions in regards to his four-wheel drive truck relating to his “business trips.” Billy has indicated that the expenses associated with several trips to Las Vegas were also primarily of a business nature. There were also other large deductions without providing any substantial documentation or evidence.
b. Per the Internal Revenue Code (IRC) Section 162, the key words relating to the case would be that business expenses are allowed for “ordinary and necessary expenses…on any trade or business.” What constitutes as an ordinary and necessary business expense would be that ordinary means that it is a common expense and is accepted in
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One option that Helen may opt to take would be that Helen may trust Billy and assist in preparing his tax return that includes a plethora of business deductions for business expenses “associated with several trips to Las Vegas…’primarily of a business nature.’” Billy also claimed several other large deductions without providing substantial documentation or evidence to support his claim. With all of the information and facts that are gathered, however, Helen may analyze the situation and make a determination that per IRC Section 162, Billy cannot make a business deduction for his personal trips, expenses associated with several trips to Las Vegas, and other large deductions without any documentation or evidence. Therefore, Helen may decide to refuse to provide tax practitioner services for …show more content…
It is best for Helen to refuse to provide tax practitioner services to Billy as per IRC Section 162, it would be highly unethical and incorrect to claim business deductions for personal trips, expenses associated with several trips to Las Vegas, and other large deductions without substantial documentation. This is because Helen also becomes responsible for the tax returns of Honest Bill’s Used Car Lot’s as it indicates that she would “complete and file his return before the April 15 deadline…” The tax governmental agency, presumably the IRS, may randomly decide to conduct an audit to review Bill’s books and records. The tax auditor may inspect the documents that were filed and request for documentation to support his claim for business deductions. Without any substantial documentation or evidence, Billy cannot furnish any documents, and Helen would then become involved in the audit case as she was the CPA tax practitioner who completed and filed his tax return. The tax auditor may then issue an assessment per IRC Section 162, and there may also be additional penalties and
In “The Unscrupulous Partner” ethics case, Andrea Fuller is a tax partner at a local certified public accounting firm located in Southern California. Ed McDouglass is a general partner of Skyline Views, a limited liability partnership that constructs, operates and sells condominiums. By devoting 100% of his time into the limited liability partnership and taking charge of any situation, Ed functions as the general manager for Skyline Views. Therefore, he is allowed a management fee to include two percent of expenses and ten percent of the year’s net income if it exceeds $100,000. As a result, Ed hired Andrea to complete the tax return for Skyline Views.
Moreover, to receive a record of completion from the IRS, the independent preparer must agree to accept the duties and restrictions relating to practice before the IRS in subpart B and section 10.51 of Treasury Department Circular No. 230. Rev. Proc. 2014-42 § 4.05(4). The voluntary program does not bind return preparers to all of Circular 230. Subpart B of Circular 230 describes noncontroversial ethical duties and responsibilities applicable to anyone who represents a taxpayer before the IRS, such as the duty to provide information promptly when requested, the duty not to charge an unconscionable fee, and rules regarding conflicts of interests and solicitation of
Tommy Takem owns a small appliance store in the southwest part of the state of Virginia. Tommy has built his business on targeting the poor, unsophisticated, and uneducated in the Appalachian regions of Virginia, Kentucky, Tennessee, and West Virginia. There is little competition in the region where he sells his goods; therefore, he charges 10-20% higher prices than the nearest retail competition. Furthermore, as a ruse to increase sales, Takem’s has hired a few high pressure salespeople to go door-to-door selling the appliances and electronics at a markup of 30% more than his retail location, though this information is not disclosed to the purchaser. Also, as most of Tommy’s clientele have poor credit, the financing is handled by Takem’s Appliances as well, with an additional charge of 15% plus the highest interest rate allowable by
'"I don't belong here and I am not going to play their game.' 'If I were to cooperate in all these things, it would be as if I were saying, 'I'm a guilty man, and I am not a guilty man"' (New Jersey).
On July 26th, 2013, tragedy struck in Toronto, just before 12am. An 18-year old male named Sammy Yatim was shot and killed by a Toronto officer. As shown in the videos from the streetcar, Sammy boarded the car that was heading westbound on Dundas street at approximately 11:45 pm (Rogan,2014). When boarding the streetcar, he headed to the very back. Shortly after, four females boarded and also sat at the back near Sammy. Not long after, he drew out his switchblade knife that was 12cm long and tried to slash a passenger named Bridgette Mcgregor’s throat. He had also pulled out his penis and exposed himself to the girls. This put everyone on board into a panic. Everyone rushed to the doors of the streetcar trying to get away from Yatim. With the knife in one hand and his penis in the
It was the year 1850 and there was a young hungry couple trying to make a fortune. There names were Billy Bob Joe and Catherine. They lived in Tennessee and heard about the big ruckest in California over the goal. They were broke and poor so one day they just gathered up all the there things and realized they had nothing else going in there lives, so they had no other choice but to take the big risk. When they got there it was all ready really busy so they had to get to work right then. They grabbed a mining pan, a shovel, and a pick for mining that day they found a big chunk of gold. They found it in a place nobody was so they kept there mouth shut. Over the next couple of weeks they had way more then they even expected. Billy Bob was so happy
Silver Rights is a true story from the front lines of the civil rights struggle--the story of the Carter family of Sunflower County, Mississippi. African-American sharecroppers and the parents of seven children, Mae Bertha and Matthew Carter accepted their school district's 1965 "Freedom of Choice" offer and enrolled their seven school-age children in the formerly all-white schools of Drew, Mississippi. The Carter family was the only family brave enough to send their seven children to be the first children to ever desegregate the previously all white schools. Through the Carter children and their experiences we learn that it is important to stand up for what you believe in, even if that means standing alone, because you never know what kind of difference you could be making in the world.
I will test the hypothesis in this study based on the results of the t-test on the digit with an unusually high frequency in the financial statements of avoiders. As mentioned above, the test sample will be used in a regression model to see if the finding of the first test is correct and persists when controls are included for firm characteristics which are associated with cash effective tax rates. More specifically, firm characteristics which have been proven to be a determinant of corporate tax avoidance in prior research.
Sale his business and keep an eye on it while being a consultant. There will be a time to create a different business and this time it will be with personal funds. This is what I plan to do in the same
Back in the early 1900s, every African American faced racial discrimination in some kind of way and many did not realize how they were affected. Rubin Carter never gave up as he faced difficult problems relating to racial discrimination. His struggle with prejudice throughout his childhood, and career left a lasting impact on the need for civil rights due to being wrongfully convicted. Racial discrimination was a huge problem in the North during the 1930s and African Americans faced hard times because of this crisis. Clearly, Rubin Carter faced many harsh consequences during his childhood.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics: Ethical decision making and cases: 2011 custom edition (9th ed.). Mason, OH: South-Western Cengage Learning.
The case study “Too Hot to Hold” (Katz & Green, 2014, pg. 182), describes a business buying opportunity available to Gwendolyn Bonnefille, a struggling single mother. The business for sale is a small, apparently home-based, hot sauce making business. Sly, the current owner, makes, bottles, and labels the Caterwauling Coyote hot sauce from his kitchen, and then distributes the finished product to gift and specialty shops in Texas (Katz & Green, 2014). In her quest to purchase the business, Ms Bonnefille discovers that there are some inconsistencies between the business’s financial statements and the Sly’s personal tax returns. The case study provides the Sly’s explanation for the discrepancies and provides some information regarding the terms of the business sale. The case study then goes on to ask three questions regarding the Sly’s explanation of the financial discrepancies, the accuracy of the selling price, and other information the Ms Bonnefille should consider prior to making a decision to purchase Caterwauling Coyote from its current owner (Katz & Green, 2014). Although I might not address the questions in order, this essay will address all of these concerns and evaluate whether this purchase may or may not be a good option for the Ms Bonnefille.
Albert Carr argues that business is a game and that business ethics differs from private life ethics that individuals practice. Carr explains that practices such as bluffing and not telling the whole truth are morally acceptable in business context. Carr claims that one cannot apply a single standard of ethics universally as situations differ from one to another. My response to such claim is that I refuse to accept that businesses cannot be strictly ethical.
Many new business owners struggle with the decision of whether or not to outsource tax compliance services plus “on average 55% of SME’s consider cost of service is an obstacle for them to seek external advice” (Banham, 2014). There are many tax authorities to which a business can owe taxes such as payroll taxes, self-employment taxes, property taxes and sales taxes to name a few. To make matters more confusing, the tax forms, filing and payment deadlines for each type of tax are also individual. Tax errors can occur in a number of ways and are not simply limited to under-reporting income. Other types of errors that can bring about penalties include applying deduction limitations incorrectly and worker misclassification. The IRS grants leniency to first time offenders that fail to file, pay or make timely deposits under the First Time Penalty Abatement policy. The penalties assessed for underpayment of taxes due to negligence are not covered under this policy. The majority of young businesses are not equipped with the financial backing to withstand the blow of such penalties resulting from an error on a tax
This essay is to tell the life story of Kevin Carter, the Famous Pulitzer Prize Photographer and his work. Kevin was born in 13 September 1960 and ended his life 27 July 1994 when he was at a young age when he was 33.