Cover Page

Title Page

Copyright Page

Preface

About the Authors

Acknowledgements

Contents

Table of Contents

CHAPTER 1 Legislative Sources of Authority

¶1001 Introduction

¶1003 An Introduction to Tax Authority

¶1005 Legislative Authority: A Historical Perspective

¶1007 The Legislative Process

¶1009 The Internal Revenue Code: A Closer Look

¶1011 Evaluating and Locating Legislative Authority

¶1013 “Substantial Authority” in Tax Controversies

¶1015 Summary

CHAPTER 2 Administrative Sources of Authority

¶2001 Introduction

¶2003 An Introduction to Administrative Authority

¶2005 Regulations

¶2007 Revunue Rulings

¶2009 Revenue Procedures

¶2011 Private Letter Rulings (PLRs)

¶2013 Other Forms of Letter Rulings: Technical Advice Memoranda (TAMs), Field Service Advices (FSAs), and Determination Letters

¶2015 Miscellaneous Technical Guidance

¶2017 Informational Releases of the IRS

¶2019 Audit-Related Releases

¶2021 Compliance-Related Releases

¶2023 Summary

CHAPTER 3 Judicial Sources of Authority

¶3001 Introduction

¶3003 The Court’s Authority

¶3005 The U.S. Tax Court

¶3007 The U.S. District Court

¶3009 The U.S. Court of Federal Claims

¶3011 The Courts of Appeal

¶3013 The U.S. Supreme Court

¶3015 Locating and Citing Judicial Authority

¶3017 Reading and Assessing Court Opinions

¶3019 Factors to Consider in Choosing a Court

¶3023 Summary

CHAPTER 4 Tax Research—Locating and Assessing Tax Authority

¶4001 Introduction

¶4003 Types of Tax Research

¶4005 Steps in Tax Research

¶4007 The Research Memo

¶4009 The Client Letter

¶4011 Electronic Tax Services—An Introduction

¶4013 Print Services—Code-Based Versus Topic-Based

¶4015 The Current Players—An Historical Perspective

¶4017 Exercise 1: Going Directly to a Particular Code Section

¶4019 Formulating a Search Expression

¶4023 Performing a Citation Search with the Standard Federal Income Tax Reporter

¶4025 RIA Checkpoint on the Web

¶4027 Performing a Menu-Walk Search with the RIA Federal Tax Coordinator 2nd

¶4029 Performing a Citation Search with the RIA Federal Tax Coordinator 2nd

¶4031 Summary

CHAPTER 5 Landmark Judicial Decisions—Income

¶5001 Introduction

¶5003 Objectives of Taxation—The Macro View

¶5005 Considerations in Measuring Taxable Income

¶5007 Income Recognition and Accounting Methods

¶5009 Concepts Overriding Accounting Method Elections

¶5011 Landmark Income Cases—The Realization Concept

¶5013 Landmark Income Cases—Windfall Gains

¶5015 Landmark Income Cases—Accounting Methods

¶5017 Assignment of Income Issues

¶5019 Summary

CHAPTER 6 Landmark Judicial Decisions—Deductions

¶6001 Introduction

¶6003 The Four Positive Criteria of a Deduction

¶6005 The Four Negative Criteria of a Deduction

¶6007 Accounting for Expenses Under the Cash Method

¶6009 Accounting for Expenses Under the Accrual Method

¶6011 Economic Performance: When Does It Occur?

¶6013 Landmark Deduction Cases—Testing the Criteria

¶6015 Landmark Deduction Cases—Business v. Personal

¶6017 Landmark Deduction Cases—Methods of Accounting

¶6019 Summary

CHAPTER 7 Landmark Judicial Decisions—Property Transactions

¶7001 Introduction

¶7003 The Capital Asset Definition

¶7005 The Capital Gain and Loss Netting Process for Individuals

¶7007 Capital Gain and Loss Netting Process—Corporations

¶7009 The Special Case of Code Sec. 1231 Properties

¶7011 Nontaxable Exchanges of Property

¶7013 Landmark Property Cases—The Capital Asset Definition

¶7015 Landmark Property Cases—The Realization Principle

¶7017 Landmark Property Cases—Nontaxable Exchanges

¶7019 Summary

CHAPTER 8 Landmark Judicial Decisions—Accounting Records, Accounting Methods and Income Allocations

¶8001 Introduction

¶8003 Accounting Records Cases

¶8005 Special Accounting Method Cases

¶8007 Income Allocation Method Cases

¶8009 Summary

CHAPTER 9 Tax Practice—Procedures, Administration and Sanctions

¶9001 Introduction

¶9003 Role and Structure of the Internal Revenue Service

¶9005 Taxpayer Rights

¶9007 Selecting a Return for Audit

¶9009 Types of IRS Examinations

¶9011 Working with an Auditor

¶9013 Possible Audit Outcomes

¶9015 Interest

¶9017 Statute of Limitations

¶9019 Penalties

¶9021 Civil Penalties Applicable to Taxpayers

¶9023 Criminal Penalties Applicable to Taxpayers

¶9025 Penalties Applicable to Tax Return Preparers

¶9027 Civil Penalties Applicable to Preparers

¶9029 Criminal Penalties Applicable to Preparers

¶9031 Reportable Transactions

¶9033 Administrative Constraints: Circular 230

¶9035 Statements of Standards for Tax Services

¶9037 Summary

CHAPTER 10 Tax Communications Between the Client, Tax Preparer and the IRS

¶10,001 Introduction

¶10,003 Why Keep Records?

¶10,005 Recordkeeping for Individuals

¶10,007 Recordkeeping for Businesses

¶10,009 Sample Recordkeeping System

¶10,011 Tax Preparer Workpapers

¶10,013 Best Practices for Tax Advisors

¶10,015 Summary

CHAPTER 11 Tax Planning for Individuals

¶11,001 Introduction

¶11,003 Tax Planning Constraints: The Alternative Minimum Tax

¶11,005 The Individual AMT Computation: A Comprehensive Example

¶11,007 Tax Planning Constraints: The Passive Activity Limitations

¶11,009 Tax Planning Constraints: The Investment Interest Limitations

¶11,011 Tax Planning: Tax-Exempt Income and Fringe Benefits

¶11,013 Tax Planning: Capital Gains and Losses

¶11,015 Tax Planning: Rental Investments as Tax Shelters

¶11,017 Tax Planning: Selected Personal Deductions

¶11,019 Tax Planning: Vacation Rental Homes

¶11,021 Tax Planning: College Education Expenses for Children

¶11,023 Summary

CHAPTER 12 Tax Planning for Compensation and Retirement

¶12,001 Introduction

¶12,003 Nontaxable Fringe Benefits: A Brief Review

¶12,005 Cafeteria Plans, FSAs, HRAs, and HSAs

¶12,007 Deferred Compensation: Qualified Plans

¶12,009 Code Sec. 401(k) Cash or Deferred Arrangements (CODAs)

¶12,011 SEP and SIMPLE Retirement Plans

¶12,013 Individual Retirement Accounts (IRAs)

¶12,015 Pension Maximization Strategies

¶12,017 Other Deferred Compensation Strategies

¶12,019 Summary

CHAPTER 13 Gift and Estate Tax Planning I—The Basics

¶13,001 Introduction

¶13,003 The Unified Transfer Tax System in General

¶13,005 The Federal Gift Tax

¶13,007 The Federal Estate Tax

¶13,009 The Generation-Skipping Transfer Tax

¶13,011 Planning Basics—Lifetime Gifts

¶13,013 Planning Basics—Minimizing Probate Costs

¶13,015 Planning Basics—Optimizing the Estate Marital Deduction

¶13,017 Summary

CHAPTER 14 Gift and Estate Tax Planning II—Trusts and Closely-Held Business Strategies

¶14,001 Introduction

¶14,003 Powers of Appointment—Tax Considerations

¶14,005 Trusts: Classification as Revocable and Irrevocable

¶14,007 Irrevocable Transfers with a Retained Life Estate: General Tax Consequences

¶14,009 Insurance Trusts and Trusts for Minors

¶14,011 Trusts and Charitable Contributions

¶14,013 Estate Freezes—An Introduction

¶14,015 Installment Sales as a Freeze Strategy

¶14,017 Using Trusts for Estate Freezes

¶14,019 Minority Discount Strategies for Family-Held Businesses

¶14,021 The Limited Partnership as an Estate Planning Tool

¶14,023 Utilizing the Intentionally Defective Irrevocable Trust

¶14,025 Documenting and Implementing an Estate Plan

¶14,027 Summary

CHAPTER 15 Business Planning—Choice of Entity

¶15,001 Introduction

¶15,003 Business Entities: An Introduction

¶15,005 Importance of the Choice of Entity Decision

¶15,007 The Sole Proprietorship as a Business Entity

¶15,009 The Partnership as a Business Entity

¶15,011 The S Corporation as a Business Entity

¶15,013 The C Corporation as a Business Entity

¶15,015 A Note on Personal Services Corporations (PSCs)

¶15,017 Limited Liability Companies and Limited Liability Partnerships

¶15,019 Miscellaneous Considerations in Choice of Entity

¶15,021 Choice of Entity: Final Summaries

¶15,023 A Multi-year Spreadsheet Model for Assessing the Tax Consequences of Each Entity Type

¶15,025 Summary

CHAPTER 16 Tax Planning Strategies—Business Entities

¶16,001 Introduction

¶16,003 Adopting and Changing a Method of Accounting

¶16,005 Inventory Method Issues—Planning Possibilities

¶16,007 Tax Planning—Acquisition, Use and Disposition of Property

¶16,009 Corporate Planning Ideas

¶16,011 Summary

CHAPTER 17 The Tax Accrual: An Introduction to Financial Accounting Issues

¶17,001 Introduction

¶17,003 Book-Tax Differences

¶17,005 Income Taxes in the Financial Statements

¶17,007 Valuation Allowance

¶17,009 Earnings of Foreign Subsidiaries

¶17,011 Uncertain Tax Positions

¶17,013 Tax Reporting Requirements of Book-Tax Differences and Uncertain Tax Positions

¶17,015 Concluding Thoughts

¶17,017 Summary

CHAPTER 18 Tax Reform Proposals

¶18,001 Introduction

¶18,003 Perceived Deficiencies of the Current Tax System

¶18,005 Tax Reform Proposals: The View from 10,000 Feet

¶18,007 Tax-inclusive and Tax-exclusive Rates

¶18,009 The Value-Added Tax

¶18,011 National Retail Sales Tax

¶18,013 Flat Tax

¶18,015 Personal Consumption Taxes

¶18,017 Modifying the Current System: The President’s 2010 National Commission on Fiscal Responsibility and Reform Plan

¶18,019 Concluding Thoughts

¶18,021 Summary

GLOSSARY OF TAX TERMS

TOPICAL INDEX

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

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