Federal Tax Memorandum Essay example
High school
Essay
Finance & Accounting
Pages 3 (753 words)
Download 0
Tax Research Memorandum Name: Institution: Tax Research Memorandum File: From: RE: Peaceful Pastures Funeral Home, Inc Facts Peaceful Pastures Funeral Home, Inc. is an accrual service taxpayer. It provides a full line funeral services as well as selling goods related to those services…

Introduction

The new product design allowed clients to make prepayment for the goods and services and be accorded with a discount at the time of their death. The contract entered states that the payments are refundable at any time the purchaser request for them until the time when they receive the goods and services. Peaceful record this payment and income for the year the client received the funeral services. IRS sent Peaceful an audit notice in which it contends that the amount prepared under the Peaceful product design constitute prepaid income and must form Peaceful income therefore subject to tax in the year Peaceful received it. Issue and Conclusion Is Peaceful Funeral Homes, Inc entitled to a tax deduction for the income it receives from clients under the prepaid product design? No, the amount received is not taxable because the contract allows the customers to reclaim their money before purchase. Analysis The income received under the prepaid product are susceptible to refund upon customer request and thus do not form the real income of the business. From the contract, customers of Peaceful Funeral Homes Inc, reserve the right to demand their money before the actual purchase of the services and goods offered by this firm. ...
Download paper
Not exactly what you need?

Related papers

Tax assignment
They include Income Tax, Corporation Tax, Duties on goods and services, National Insurance Contribution, Value Added Tax and Fuel Duty. All these taxes have different laws and guiding principles. This paper examines the main rules that govern Income Tax and Corporation Tax. It outlines the main components of these taxes and the obligations of the taxpayer in fulfilling his obligations to HMRC.…
Tax Return Position Paper
The internal revenue code contains landmarks on dates that the code was amended. These landmarks help the taxpayer to trace tax references and materials used in taxation. For example, the internal revenue code of the United States is contained in Title 26 of the United States Code. The United States Code contains tax laws of the federal government. The advantages of reading the internal revenue…
FINANCE AND ACCOUNTING
Memorandum …
Federal Tax Case
In our opinion, there are three key points of law upon which the Supreme Court will likely decide this case. They are as follows: 1. Time and place When considering taxation on Separation Payment, time and place are relevant. Although regulations seem to cover the issue on taxation of separation payment, those regulations were issued in 1993 and were made retroactive, by the Treasury Department,…
Federal Tax Case
While the United States Court of Appeals upheld the trial court’s findings, not all the judges agreed. He appealed. Law: Mr. Waterman had excluded the tax payment under section 112 as compensation while on active duty in combat zone; he became entitled to the separation payment while he was on this duty. He points out that a separation payment should be treated no differently than other types of…
Federal Reserve
The Board of Governors is appointed by the President who controls the functions of the Federal Reserve System. There are Federal Reserve Banks which operates in major cities of US. The major objectives of the Federal Reserve System are aimed at the welfare of the US economy. The Federal Reserve System in US is responsible for maximizing the employment opportunities in US, stabilizing the prices in…
Tax case meno
Normally, the cost of tools forms part of capital goods that the company requires to run its operation. Under the IRC section 263A, the uniform capitalization rule dictates that the taxpayer should produce information for all direct costs and certain in direct cost concerning tangible and real property. The law defines tangible and real property as those that lead to production such as to…