1 Accounting 543 Taxation of Corporations Fall 2014 Classroom:, Tuesday and Thursday, 1:40-2:55 pm Instructor: G.P. Diminich Office: 25 Calhoun Street, Suite 250, Charleston, SC Office telephone: Office assistant: Home telephone: Office hours: Prerequisites: Graduate standing, undergraduate Tax I Required Text: Prentice Hall s Federal Taxation, 2015 Comprehensive. If you choose to purchase an older version of the book (2013 or 2014), you will need to substantiate your arguments about exams or class answers using the 2015 version. You should use Research Institute of America s Checkpoint web account for every class. Book s Web site: Course Description: Students will discuss and analyze income tax law and preparation requirements for corporations, including interstate and international transactions. Ethical guidelines, including Circular 230 and Statements on Responsibilities in Tax Practice will be considered. Course Objectives: This course will foster learning goals including effective communications by requiring student to write and present cases outlining corporate tax application and solutions. Ethical awareness will be considered, by the analysis of the public policy implications of the various corporate tax planning application and strategies. Students will have many opportunities to demonstrate and develop the ability to problem solve via the problems encountered in corporate tax application and planning. Global awareness will be strengthened as a result of the study of the corporate taxation of international transactions. The student should develop a working knowledge of the primary and secondary corporate tax resources used in practice to solve problems, distinguish the level of authority of each resource, and how to effectively utilize such resources. Armed with this knowledge, the student should be able to develop solutions to corporate tax problems through research and communicate the results of these efforts both in written form and in oral presentation. By doing this, the student will demonstrate synthesis, communication skills and quantitative fluency. Also, the student should learn to properly analyze statutory, regulatory, and case law both in both written format as well as in an oral presentation, which will help foster intellectual innovation and creativity. The course should provide an introduction to a variety of matters encountered in corporate tax practice, including ethics, professional liability, professional standards, and global and civic responsibility.
2 (Broadened Perspective): Skills required in a professional tax career will be highlighted and the skill of peer evaluation will be developed. (Development of Specific Skills): This course will follow the corporation from inception through liquidation. The purpose of this course is to familiarize the student with the Internal Revenue Code, Treasury Regulations, administrative pronouncements, and case law as those authorities relate to corporations, thus giving the student a broad technical expertise regarding the taxation of corporations. (Professional Development): Special attention will be given to ethical issues and preparer penalties, including Circular 230. (Effective Communication): Each student will provide a written research memorandum and final written research paper, both being presented to the class via oral presentations and power point slides. Course Format: The material in this course is presented in a discussion format. The basis of discussion will be the assigned reading materials. Handouts may be used to clarify or supplement text materials. Comments and questions are welcomed, both in class and outside of class. Student participation in every class is expected. SCHOOL OF BUSINESS LEARNING OBJECTIVES RELEVANT TO THIS COURSE: Communication Skills: Students will demonstrate the ability, via both written and spoken word, to effectively present, critique, and defend ideas in a cogent, persuasive manner. Quantitative Fluency: Students will demonstrate competency in logical reasoning and data analysis. Global and Civic Responsibility: Students will able to identify and define social, ethical, environmental and economic challenges at local, national and international levels. Students will also be able to integrate knowledge and skills in addressing these issues. Intellectual Innovation and Creativity: Students will be able to demonstrate their resourcefulness and originality in addressing extemporaneous problems. Synthesis: Students will demonstrate the ability to integrate knowledge from multiple disciplines incorporating learning from both classroom and non-classroom settings in the completion of complex and comprehensive tasks. Course Requirements: Your final grade will be determined from your performance on four exams, at least one tax return, a small tax research project, a major paper on a taxation issue, and your class participation. The points allocated to each of these requirements are as follows:
3 Grading: Exam Tax Return 20 A = Exam Small Tax Research Project 20 A- = Exam Major Research Project 50 B+ = Final Exam 100 Class participation, homewk 100 B = Online quizzes 40 Total Points 630 B- = pts each) C+ = C = F = < 70 Notes Roll will be taken daily. Unexcused absences (in excess of 10%) will carry a prorata point penalty. Each exam is cumulative regarding all information covered to date at that point in the course. Calculators will be provided for each exam and phones, calculators, etc. must be off the desk and out of reach. Major Research Paper: Topic approved in advance by instructor. The paper should be double spaced and between 12 pages (Times (new) Roman, 12 pt, do not right-justify) in length (counting cover page and bibliography). There should be a cover page (which includes an abstract), subheadings in the body of the paper, and a bibliography. I expect a minimum of eight sources to be used (and thus cited) for the research paper. Organization and independent thought should be evident throughout. YOU ARE EXPECTED TO USE SOURCES BESIDES SUBSTANTIAL AUTHORITY (but your sources may include substantial authority). Refereed journal articles will be expected to be among your sources. All papers will be scanned by Turnitin.com. I expect to find no plagiarism. Exams will be given at the times indicated on the schedule of assignments. Absence from an exam must be approved by the instructor in advance. Make-up exams will not be given and an unapproved absence will result in a zero on the exam. For those with approved absences from an exam, the final exam grade will be recorded in place of the missed exam. The final exam will be ineligible for a pre-approved absence. Small Tax Research Project: The small tax research project should follow the following format: I. Facts V. Analysis II. Issue VI. Alternate authority (if any) III. Authority VII. Alternate conclusion (if any) IV. Conclusion VIII. Alternate explanation (if any) The paper should be a maximum of three pages typewritten. Single or double spaced is acceptable. Please do not right-justify your lines. Final Thoughts: The study of taxation can be very different from the study of accounting. While there are some important underlying principles in our tax system, there are also strong economic, social, and political forces that influence the structure of our system. Because taxation involves the
4 collection and distribution of real money, these forces are all vying for their "piece of the pie." The net result is that our tax system reflects a great many compromises that are intended to accommodate all of these factions. It is not surprising, then, that many provisions in our tax laws defy logic, description, or even human comprehension. This can lead to exasperation, confusion, and general feelings of inadequacy. But, if you hang in there, I think you will find that the study of taxation, far from being dull and boring, can be both challenging and fascinating. When the concepts get fuzzy, feel free to stop by and talk about them. A Word About Cheating: DON'T! Date Day Text Chpt Topics Text Assignments Item Due 8-19 T Review of the Tax Environment 8-21 R 2-2 Corporate Formation and Capital Structure 1-26,30,31,32,34,35, T 2-2 Corporate Formation and Capital Structure 38,39,41,42,43,44, R 2-3 The Corporate Income Tax 1-29,34,35,36,38,39, T 2-3 The Corporate Income Tax 42,57, R 2-4 Corporate Non-Liquidating Distributions 1-23,24,35,36,38,39,40, 41, T 2-4 Corporate Non-Liquidating Distributions 43,44,45,46,48,49,50, 51,54,55, 9-11 R Exam #1 Chapters 2-4 Including Tax Environment 1120 DUE Quizze s Exams Quiz 1 Exam 9-16 T 2-6 Corporate Liquidating Distributions 1-29,33,34, R 2-6 Corporate Liquidating Distributions 37,39,40,41,49,51, T 2-7 Corporate Acquisitions and Reorganizations 1-37,41,42,43,44,45 Quiz R 2-7 Corporate Acquisitions and Reorganizations 4661,62,63,64,50,52,5 3, 55,56,69, 9-30 T 2-8 Consolidated Tax Returns 1-25,29,31,32,33,37,48, 49,51 2 R Exam #2 Chapters 6,7,8 Exam 7 T 2-5 Other Corporate Tax Levies R 2-5 Other Corporate Tax Levies 35,37,59,63 T C of C Fall Break: No class meeting S R P *
5 R T Accounting for income Taxes Accounting for Income Taxes R 1-9 Employee Expenses and Deferred Comp (Q, 1-44 Quiz 3 N/Q) T 1-9 Employee Expenses/Deferred Comp (Q,N/Q) 67,68,69,70,72,75 R Exam #3 Chapters 2-5, Acct for Inc Tx, Ch 1-9, Def C 11-4 T Research Paper Presentations R Research Paper Presentations T 1-12 Property Transactions: Non-Taxable Exchanges 1-22,26,28,29,32,35, L R P ** 11- R 1-12 Property Transactions: Non-Taxable Exchanges 38,40,41,42, T Taxation of Not For Profit Entities/Int l/interstate 11- R Taxation of Not for Profit 20 Entities/Int l/interstate 11- T Final Exam Review 25 Students caught cheating in this class will receive a failing grade for the course and will have their behavior reported to the Dean of Students for appropriate disciplinary action. The Honor Code of the College of Charleston ( is expected to be followed. Plagiarism is also cheating. Plagiarism and cheating refer to the use of unauthorized books, notes, or otherwise securing help on a test; copying tests, assignments, reports or term papers; representing the work of another person as one's own; collaborating, without authority, with another student during an examination or in preparing academic work; signing another student's name on an attendance sheet; or otherwise practicing dishonesty. At the core of the College of Charleston community are individuals from diverse backgrounds whose lives are intertwined in support of the uplifting of the human condition through comprehensive studies. As with all communities, there is a moral code of ethical behavior that binds participants together and a body of official rules and regulations that defines personal freedoms and responsibilities. The former is codified in our Honor Code and Code of Conduct. It applies to all members of the College community and is intended to promote an atmosphere of trust and fairness in the classroom and in the conduct of daily campus life. The Honor Code specifically forbids lying, cheating, attempted cheating, stealing, attempted stealing, and plagiarism. You are expected to read the Honor Code (found on back of page) and will be held accountable for its contents. Quiz 4
6 Quote: Decisions to embrace the corporate form of organization should be carefully considered, since a corporation is like a lobster pot: easy to enter, difficult to live in, and painful to get out of. Boris I. Bittker & James S. Eustice, Federal Income Taxation of Corporations and Shareholders, p. 2.01, 6 th edition, ACCT 543 Corporate Taxation: G.P. Diminich reserves the right to alter the following schedule Cumulative Final Exam: Tuesday December 9 th Noon until 3:00 pm. 1120= IRS Form 1120 *SRP = Small Research Project Due **LRP= Large Research Project Due
7 College of Charleston Honor Code and Academic Integrity Lying, cheating, attempted cheating, and plagiarism are violations of our Honor Code that, when identified, are investigated. Each incident will be examined to determine the degree of deception involved. Incidents where the instructor determines the student s actions are related more to a misunderstanding will handled by the instructor. A written intervention designed to help prevent the student from repeating the error will be given to the student. The intervention, submitted by form and signed both by the instructor and the student, will be forwarded to the Dean of Students and placed in the student s file. Cases of suspected academic dishonesty will be reported directly by the instructor and/or others having knowledge of the incident to the Dean of Students. A student found responsible by the Honor Board for academic dishonesty will receive a XF in the course, indicating failure of the course due to academic dishonesty. This grade will appear on the student s transcript for two years after which the student may petition for the X to be expunged. The student may also be placed on disciplinary probation, suspended (temporary removal) or expelled (permanent removal) from the College by the Honor Board. Students should be aware that unauthorized collaboration--working together without permission-- is a form of cheating. Unless the instructor specifies that students can work together on an assignment, quiz and/or test, no collaboration during the completion of the assignment is permitted. Other forms of cheating include possessing or using an unauthorized study aid (which could include accessing information via a cell phone or computer), copying from others exams, fabricating data, and giving unauthorized assistance. Research conducted and/or papers written for other classes cannot be used in whole or in part for any assignment in this class without obtaining prior permission from the instructor. Students can find the complete Honor Code and all related processes in the Student Handbook at Class 1 act involves significant premeditation; conspiracy and/or intent to deceive, e.g., purchasing a research paper. Penalties for Class 1: XF and either suspension or expulsion assigned if student found responsible for this class of offense by Honor Board. Class 2 act involves deliberate failure to comply with assignment directions, some conspiracy and/or intent to deceive, e.g., camoflauged use of the Internet when prohibited, some fabricated endnotes or data, copying several answers from another student s test.
8 Penalties for Class 2: XF and other sanctions assigned if student found responsible for this class of offense by Honor Board. Class 3 act mostly due to ignorance, confusion and/or poor communication between instructor and class, e.g., unintentional violation of the class rules on collaboration. Penalties for Class 3: Zero on the assignment/test, resubmission of assignment, etc.