Tax CH 2 Tax compliance Tax Authorities and Research Individuals who must file determined by 1 Filing status 2 Age 3 Gross income Gross income standard deduction Taxable income Standard deduction Threshold gross income April 15th must have taxes filled Statute of limitations amended return or the IRS can assess a tax deficiency 3 years they go from when you submitted your tax return so either 3 years from April 15th or 3 years from an extension 6 years if gross income omitted exceeds 25 of gross income If they think you had a fraud or failure to file NO LIMIT Average individual audit rate 2 HELP FIND WHO TO AUDIT IRS computer programs Discriminant Function DIF system scoring system Document perfection Information matching programs 3 kinds of audit Correspondence audit send a letter Office audit go into an office and question you Field Audit IRS come into a business and look through a company The worst happens Assessment You can pay Or wait for a 30 day letter after 30 days you can submit an appeal with the IRS Or you can wait for a 90 day letter you can give up and pay or go to court against it Common law system our court system is based on precedents what has happened before and hierarchy Don t have to pay first looking to take your case to court must use one of these U S tax court don t have to pay what you owe first U S Court of federal claims Must pay first appeals to circuit court of appeals U S district court Local Court possible jury trial Appeals to the circuit court of appeals If you owe something small 50 000 you can go to the U S Tax Court Small Claims Supreme Court Writ of Certiorari Official Sources of Tax Law 1 Statutory sources internal revenue code 2 Judicial sources the courts 3 Administrative sources IRS pronouncements Secondary Authorities unofficial tax information and interpretation 1 Copilot 2 Google 3 Tax book The 16th Amendment Congress the ability to tax income directly from whatever source derived The courts only interpret the law they don t make their own law Circuit appellate level Supreme court Highest level Stare Decisis A court will rule consistently with its own previous rulings Golsen Rule The tax court will match rulings of the circuit court that has appellate jurisdiction for the case as if it were tied to that circuit Administrative Sources The US Treasury 1 Regulations 2 Rulings 3 Procedures 4 Letter rulings cannot cite as precedent Acquiescence Agree with the court decision and won t litigate the issue in the future Nonacquiescence Not agree with the court decision and will continue to litigate issue Tax research 1 Research 2 Tax issues need to figure out 3 Relevant authorities to answer your question 4 Hierarchy and jurisdiction 5 Document and communicate This is important because you will find conflicting results Tax Memo Document for the firm Letter to Client explain the answer Tax research and planning is the highest paid accounting job AICPA Code of Professional conduct AICPA Statement on standards for tax services IRS Circular 230 Professional Consequences Suspension or loss of license sued for malpractice