CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN: 9780357110362
Author: Murphy
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 1, Problem 79EDC
To determine
Explain the actions that should be done in each case.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The AICPA has issued standards for CPAs in tax practice, called Statements on Standards for Tax Services (SSTS). Download the Statement on Standards for Tax Services No. 1-7Links to an external site.. What does the SSTS say about a CPA relying on information supplied by the client (see SSTS #3)? Are estimates ever permitted to be used in preparing a tax return (see SSTS #4)?
Please choose one of the duties of a tax professional practicing before the IRS, discussed in the Treasury Department Circular 230 and:
Describe the concepts and objectives of the duty.
Discuss how a tax professional needs to conduct themselves in order to comply with the responsibility.
Explain what kind of challenges and pressure an accountant could face in complying with the responsibility.
Performance standards:
Accomplish the BIR (Bureau of Internal Revenue) forms
MELCS: Explain the procedure in the computation of gross taxable income and tax due.
Mr. Sabado need to pay his tax. You are an agent hired by Mr. Sabado to compute his taxable income and
tax due. The BIR agent will check and evaluate based on accuracy of the information prepared.
Instructions:
From the given information below compute the total taxable income and total income tax due on each
scenario.
Mr. Sabado, Production Manager of M.A.R Corp., earned annual compensation in 2020 of P
2,333,000, exclusive the 13h month and other benefits in the amount of P250,000 but net of
mandatory contributions to SSS and Philhealth. Aside from employment income, he owns a
convenience store, with gross sales of P3,555,000. His cost of sales and operating expenses are
P1,500,000 and 800,000, respectively, and with non-operating income of P250,000.
а.
Mr. Sabado signified his intention to be taxed at 8% income tax rate on…
Chapter 1 Solutions
CONCEPTS IN FED.TAX.,2020-W/ACCESS
Ch. 1 - Briefly state Adam Smiths four requirements for a...Ch. 1 - Based on the discussion in the chapter, evaluate...Ch. 1 - Prob. 3DQCh. 1 - Based solely on the definitions in the chapter, is...Ch. 1 - As stated in the text, the federal income tax is...Ch. 1 - How are federal, state, and local income taxes...Ch. 1 - How is a sales tax different from an excise tax?Ch. 1 - Who is responsible for collecting sales and excise...Ch. 1 - Prob. 9DQCh. 1 - Prob. 10DQ
Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - Prob. 13DQCh. 1 - LO3 Identify three primary sources of tax law.Ch. 1 - Explain why the following statement is not...Ch. 1 - What is the federal income tax base?Ch. 1 - Prob. 17DQCh. 1 - Prob. 18DQCh. 1 - How is gross income different from income?Ch. 1 - LO4 What are the three basic tests that an expense...Ch. 1 - Prob. 21DQCh. 1 - LO4 How is a transaction loss different from an...Ch. 1 - How does the legislative grace concept help...Ch. 1 - Prob. 24DQCh. 1 - Explain the pay-as-you-go system.Ch. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Prob. 28DQCh. 1 - Prob. 29DQCh. 1 - Prob. 30DQCh. 1 - What are the three types of IRS examinations?Ch. 1 - Prob. 32DQCh. 1 - Prob. 33DQCh. 1 - Prob. 34DQCh. 1 - Prob. 35DQCh. 1 - Prob. 36DQCh. 1 - Prob. 37DQCh. 1 - LO7 Evaluate the following statement: The goal of...Ch. 1 - It has often been said that only the rich can...Ch. 1 - Prob. 40PCh. 1 - Prob. 41PCh. 1 - Prob. 42PCh. 1 - Prob. 43PCh. 1 - Prob. 44PCh. 1 - Prob. 45PCh. 1 - Prob. 46PCh. 1 - LO2 Joe Bob is an employee of Rollo Corporation...Ch. 1 - Prob. 48PCh. 1 - LO2 Gosney Corporation has two employees. During...Ch. 1 - Prob. 50PCh. 1 - Darrell is an employee of Whitneys. During the...Ch. 1 - Prob. 52PCh. 1 - Prob. 53PCh. 1 - LO4 Explain why each of the following expenditures...Ch. 1 - Prob. 55PCh. 1 - Prob. 56PCh. 1 - Prob. 57PCh. 1 - Prob. 58PCh. 1 - Prob. 59PCh. 1 - Michiko and Saul are planning to attend the same...Ch. 1 - Inga, an attorney, completed a job for a client in...Ch. 1 - Prob. 62PCh. 1 - Prob. 63PCh. 1 - Leroy and Amanda are married and have three...Ch. 1 - Prob. 65PCh. 1 - Prob. 66PCh. 1 - Prob. 67IIPCh. 1 - Prob. 68IIPCh. 1 - Prob. 69IIPCh. 1 - Prob. 70IIPCh. 1 - Prob. 73TACh. 1 - Prob. 74TACh. 1 - Prob. 75TACh. 1 - Prob. 76DCCh. 1 - Prob. 77DCCh. 1 - Bonnie is married and has one child. She owns...Ch. 1 - Prob. 79EDC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- All tax practitioners who prepare tax returns for a fee are subject to whichof the following?I. IRS Circular 230 II. AICPA Code of Professional Conduct III. Statements on Standards for Tax Services IV. American Bar Association Code of Professional Conduct Only statement I is correct.Statements I, II, and III are correct.Statements II and III are correct. Statements II and IV are correct. Statements I, II, III, and IV are correct.arrow_forwardAssuming that you were a tax consultant of a certain company, discuss the specific provisions of the TRAIN LAW which you can use in tax planning. Apply your knowledge in tax saving strategies.arrow_forwardWhich of the following are not deductible by a CPA who prepares tax returns? a. Subscription to the Kiplinger Tax letter b. Subscription to CCH service online c.Dues to the country club to entertain clients d. Dues to the California Society of CPAsarrow_forward
- Which of the following may be relied on and cited as authority for a tax position taken on a client's return? A. A section from the Form 1120 instructions B. Revenue Ruling C. A section from the CCH Master Tax Guidearrow_forwardOn the 1040 Sch 1 screen, the Tax Professional can enter into a field which of the following types of income or adjustment directly on the input screen? Unemployment compensation. Educator expenses. Business income. Other income.arrow_forwardDiscuss the ethics requirements for tax practitioners. Please discuss both the AICPA Statements of Standards for Tax Practice AND IRS Circular 230. How do ethics requirements differ for tax practice as compared to audit practice? Compare and contrast these.arrow_forward
- 1. Bob is issued with a notice of assessment. What does the Commissioner rely on when issuing a notice of assessment?a. Taxpayer's honesty.b. Asset register.c. Taxpayer's income tax return.d. Material collected from auditing an accountant.arrow_forwardIndividual tax filing requirements and circumstances can change, so it is important to be familiar with the research tools available to you as a tax practitioner. In this discussion, you will consider research resources available for tax preparers and how they can be used in the field. What are the available commercial and noncommercial tax resources that you could utilize as a tax practitioner? Refer to Section 2-2A through 2-2C (specifically, exhibit 2-7) in your textbook for options. Which commercial resource do you think is the most beneficial to a tax practitioner? (Note that you will not be able to access the commercial resources but can find their features on their website.) Which noncommercial resource do you think is the most beneficial to a tax practitioner? How might you use the tax research process (refer to Section 2-3 in your textbook) for utilizing tax resources in preparing individual tax returns. (Think about ways you could use this process to support you in…arrow_forwardCalculator Which of the following statements best describes the purpose of the Taxpayer Bill of Rights? a.To grant to taxpayers the right to choose the time and method of payment of delinquent taxes b.To inform taxpayers of their rights in dealing with the IRS c.To inform taxpayers of the methods for properly completing their income tax returns d.To provide the IRS with additional enforcement powers e.None of these choices are correct.arrow_forward
- Explain further the steps in determining the income tax. Use the space provided for your answer. Step 1 is to identity the taxpaying party or "entity to which the tax computation formula applies. Step 2 is to determine the taxpayer's "gross income". Step 3 is to determine the expenses and certain other items that can be "deducted" in computing the taxpayer's "taxable income". Step 4 is to apply the appropriate "tax rate" to the taxpayer's taxable income to find the "tax due". Step 5 is to subtract any applicable "tax credits/payments" from the taxpayer's tax due in finding the "tax payable". Step 6 is to increase the tax by "penalties and interests" to obtain the "total amount payable".arrow_forwardIf a calendar year taxpayer's 2021 individual income tax return is mailed on June 15, 2022, the statute of limitations would normally run out on: Oa. June 15, 2025 Ob. June 15, 2024 Oc. April 15, 2025 Od. April 15, 2024 Oe. None of these choices are correct.arrow_forwardChoose the response that accurately completes the following sentence. To meet one of the due diligence requirements of a paid tax preparer, it is not enough to ask more questions; tax preparers must also:arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning