1. Why might a firm offer insurance against adverse changes in tax status? Do you see a great deal of this form of insurance? Why or why not? 2. What is meant by the term strategy-dependence as it...

1. Why might a firm offer insurance against adverse changes in tax status? Do you see a great deal of this form of insurance? Why or why not?

2. What is meant by the term strategy-dependence as it relates to the computation of the marginal tax rate? How does strategy-dependence affect the computation of the marginal tax rate? How does it affect decision-making strategies?

3. Why would a taxpayer be willing to pay a lawyer to provide a written opinion to a third party of the tax treatment to be accorded a particular set of transactions?