Internal Revenue Code (IRC) Memorandum Case Essay
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages Description/Paper Instructions
Internal Revenue Code (IRC) Memorandum Case Essay
To:Senior Partner
From:
Date: September 23, 2019
Subject: The Internal Revenue Code (IRC) Provision(s) and the Internal Revenue Service (IRS) Regulations that are Applicable to the Client’s Business-related Expenses
Relevant Facts and Issues
Several tax regulations and pertinent laws provided by the IRC and IRS are applicable to the client’s case. This is based on the evaluation of the client’s business-related expenses which include payment of a speeding ticket to Chicago, payment of overweight fine to the state of Illinois, payment of a late delivery penalty to a client, and the contribution to a candidate to Congress.
Specific Issue
Based on the assessment of the aforementioned business-related expenses, the specific issue here is whether the expenses are tax-deductible. This is because some of the expenses are associated with the truck that the client uses for business operations. As such, it is crucial to discern whether these expenses can be deducted from the client’s tax returns.
Conclusions
The IRS and IRC provide several guidelines on the business expenses that are tax-deductible. Looking at the client’s business-related expenses, it can be construed that only the payment of a late delivery penalty to a client qualifies as a tax-deductible expense. This is based on the IRC provisions and IRS regulations. Thus, it is only expenses that can be termed as “pro” to the taxpayer.
Support
To start with, the IRS regulations stipulate that no tax deduction can be considered on fines that are associated with civil infractions and/or moving violations (CCH Tax Law, 2019). In the client’s case, these fines or expenses include the payment of a speeding ticket in Chicago and the payment of overweight fine in the State of Illinois. For instance, in the case of Fresenius Medical Care Holdings, Inc., V. The U.S, the court held that Fresenius should be refunded its tax deductions for the civil infraction fine it had paid to the government (Wood, 2014).
Further, according to IRC provisions, the contribution that the client made to a congressional candidate also does not qualify as a tax-deductible expense. This is specified in the IRC 162(e) (1) (A) which indicates that no tax deductions are allowed on contributions which are meant to influence legislation (IRS, 2012).
Lastly, the IRS regulations, through section 162(f) (2) of the Internal Revenue Code, stipulate that penalties related to restitutions are tax-deductible (CCH Tax Law, 2019). This, therefore, means that the penalty that the client paid to a customer for late delivery is part of the business expenses that qualify as tax-deductible. This is because the penalty is a form of restitution for causing harm/damages to the customer.
Action(s) to Be Taken
Based on the analysis of the four business-related expenses, the client should deduct the payment of late delivery penalty from the company’s taxable returns. This is allowed under IRC 162(f) (2). However, the client should not deduct the other three expenses because they do not qualify as tax-deductible expenses and any action to exclude them can result in a lawsuit.
References
CCH Tax Law. (2019). Internal Revenue Code: Income, Estate, Gift, Employment and Excise Taxes. New York, NY: CCH Inc.
IRS. (2012). Internal Revenue Service Data. New York, NY: U.S. Government Printing Office.
Wood, R. (2014). Some fines and penalties are deductible, and it just got easier. The M&A Tax Report , 1-4.
RUBRIC
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. 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