Tax Memo or Client Letter is an analysis of the Stone's tax situation in preparation for the upcoming year's taxes. It is based on the computerized version of their tax return prepared for 2016. You will write a 2 page memo/letter that capitalized on at least three areas that the Stone's should prepare for next year (family changes, business suggestions,tax treatments, income changes, adjustments, other taxes, tax credits, etc). Please cite the IRS code or regulations that support/clarify the tax issues.
MEMO or CLIENT LETTER
Read how to write Tax Memos/ Client Letters is in chapter 2pgs2-23 and 2-32. Please cover the following in your tax memo:
Format for Tax Memo
- Clearly state the specific tax issue(s) / problems.
- Summarize all of the relevant facts that raise the issue and have a bearing on the tax problem.
- Cite the pertinent tax laws, court cases and outside research that bear on the issue
- List any assumptions made in arriving at your recommendations
- Make recommendations/ solutions and the logic or reasoning supporting it.
- Cite your references
Deliverables:
A pdfof the completed tax return
At least a 2 pg. Word document that is in the format of a tax memo or client letter addressing the ways in which the Stone's can better prepare for next year and maximize their tax return.
COMPUTERIZED INCOME TAX PROBLEM & TAX PLANNING MEMO The comprehensive problem assesses the degree of mastery in: · Understanding basic tax law concepts (under Manual Tax Return Rubric) · Tax planning · Written communication · Using Tax preparation software Rubric for Computerized Income Tax Problem and Memo (50 points) Excellent Achievement Advanced Achievement Basic Achievement Subpar Achievement Failed to Achieve Computerized Tax Return Tax Law Knowledge and Application (20%) -tax return demonstrates superior level of understanding and application of tax law; no errors; correct tax treatment of each tax issue -tax return demonstrates advanced level of understanding and application of tax law; 1-2 return errors -tax return demonstrates appropriate understanding and application of tax law; few return errors -tax return demonstrates some understanding and application of tax law; return errors -content demonstrates lack of understanding and application of tax law even on the most basic of levels; many return errors Technological Proficiency (20%) Demonstrates a superior facility and mastery of the tax preparation software; can move from interview mode to tax forms interchangeably; does not use overrides; superior ability to problem solve when results do not make sense Demonstrates proficiency with tax preparation software; can move between modes; does not use overrides; cannot always detect when results are not accurate Demonstrates a competency with tax preparation software but has not mastered the various software capabilities; makes a few entry errors Demonstrates a beginners knowledge of tax preparation software; underutilizes software capabilities; cannot always discover how to enter data properly Demonstrates a lack of understanding of the tax preparation software; relies on others to instruct on use; many return errors go undetected; uses overrides and underuses the software functions Tax Planning Memo Excellent Achievement Advanced Achievement Basic Achievement Subpar Achievement Failed to Achieve Written communication (20%) -purpose of paper is evident, AND -no problems in organization (paper flows logically), AND -minor if any incorrect usage and spelling -purpose of paper is evident, AND -few problems in organization (overall, paper flows logically), AND -few if any problems with usage and spelling -purpose of paper is evident , AND -some problems in organization (lack of flow), OR -some problems with usage and spelling -purpose of paper is not evident, OR -paper lacks organization, OR -major problems with usage and spelling -purpose of paper is not evident, AND -paper lacks organization, AND -major problems with usage and spelling Analysis and Problem Solving (40%) -Clearly and thoroughly defines all tax issues and assesses the tax implications; details a comprehensive plan to maximize the client’s tax position; clarifies assumptions and possible future adjustments -Defines the tax issues and assesses most of the tax implications if not addressed; details a plan to benefit the clients but addresses only a few key factors ; little discussion of future needs -States but doesn’t define the tax issues; assesses only 1-2 tax implications; details a tax strategy that addresses only a few key factors; little discussion of future impact -Presents a vague tax problem and only mentions one tax implication; suggests ways to address problem but has little detail; no discussion of the future impact -Tax issues are not defined; tax planning is absent; no discussion of how tax client can improve their future tax position Outcome 3 Mastered Create/Evaluate 2 Reinforced Apply/Analyze 1 Introduced Understand/ Remember 0 Not exhibited by student 1. Creates a well- defined problem statement Creates a clear and well- defined problem statement Constructs a clear problem statement, but it is not well defined Presents a problem statement that is too general or too narrowly focused No evidence of a problem statement 2. Gathers and evaluates data that appropriately explores the problem statement Collects information and thoroughly assesses it for validity, appropriateness and representation of several points of view Gathers and applies information that appears to be valid, appropriate and representative of 1-2 points of view Identifies information that is questionably valid and/or appropriate and representative of one point of view No evidence that data was explored or gathered 3. Creates a strategy or a plan Synthesizes gathered information to demonstrate a plan or strategy that is detailed and well-defined Applies gathered information into a plan or strategy that has some details, but lacks integration Organizes gathered information into a plan or strategy, but has little or no detail No evidence of organization or synthesis of gathered information 4. Creates plan for effective implementation Clearly implements or creates an appropriate plan on how to implement the plan or strategy, and addresses each key factor. Clearly illustrates how to implement the plan or strategy, but addresses only 1-2 key factors Clearly identifies how to implement the plan or strategy, but no key factors are addressed No evidence that plan or strategy was implemented nor has a proposal for how to implement the plan or strategy 5. Evaluates strategy or plan Assesses assumptions and limitations of plan by clearly showing the need for adjustment and/or revisions in the future Interprets assumptions and limitations of plan by showing the need for adjustment, but has little discussion of the future impact Lists assumptions and limitations of plan with little consideration of the need for further adjustment, and no discussion of future impact No evidence of assumptions or limitations of plan Excellence System Competency: Analysis & Problem Solving Graduates use quantitative and qualitative methods of inquiry to assess and evaluate complex problems.