Ethics are a set of moral principles that guide your right or wrong conduct in tax preparation. This paper should be only about 1 hour to write. More/less depends on your writing style and experience. Keep the paper in a professional business style. If you find yourself spending too much time, re-assess your approach. Assignment: Requirement Research and write a short paper using the IRAC format on the following ethical considerations.Client Background data. A Schedule C is used for self-employed individuals and flows to Form 1040. Clients rely on tax professionals and tax professionals rely on clients. For this to happen, there must be trust and confidence in the knowledge and the behavior of those who prepare the tax return. Strong ethics are a requirement in the field of tax. Ethics are knowing what is right and doing the right thing. A new client was referred to you. The taxpayer and spouse both run their own separate businesses. The prior year's tax return was prepared by another professional. You review it and see no Schedule C for the wife's business (it must be) and see a properly prepared Schedule E for the husband's rental business (I don't see any income or expenses for the rental business). Clients provide you with the following information: A hand-written profit and loss statement for the year. A shoebox full of receipts. Some receipts have "meals and entertainment" and others have "client meeting" written on them. You notice the receipts appear to be service for one-person dining in or one-person take-out orders. Here's a breakdown of meal deductions using examples: Type of Expense Deduction Entertaining Clients (Concert tickets, golf games, etc.) -0% deductible. Business meals with clients- 50% deductible Office snacks and meals- 50% deductible Company-wide party- 100% deductible and most entertainment expenses are not deductible at all. You see travel expenses to resorts throughout the U.S. with notes written on them stating "business expense" (Travel expenses must be ordinary and necessary. They can't be lavish, extravagant or for personal purposes. Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment length does not exceed one year. IRC). You see receipts for clothing, with notes "business expense" written on them although the clients are not required to have special clothing for their business. You note the prior tax professional included these items as allowable business expenses. You see receipts for client gifts that cost approximately $100 for each client (or more). Research at IRS.gov the maximum amount and requirements for client gifts. "You can deduct no more than $25 per person, per year for business gifts. The IRS specifically states that incidental expenses, such as postage, engraving, and gift wrapping are not included in that $25 limit" (IRS). You don't see any income or expenses for the rental business only a handwritten note about income and expenses. The new clients tell you this is all they ever give their prior tax professional. 

Assume you will prepare the return. Due diligence requires tax professionals to probe and ask questions of clients and verify supporting documents. What ethical issue is presented in the above client situation? There may be more than one; however, just focus on one ethical issue that you see. How will you resolve the ethical issue? Keep your response to four well-thought-out paragraphs based on the IRAC format shown below. The entire response should be the equivalent of one full single-spaced page (approximately 500 words). Be concise; however, give enough information so that the essay makes sense to the reader. 

Use the IRAC format to write your paper. Do not label the paragraphs by numbers you simply have four paragraphs that include the information. Using IRAC develops a systematic approach to business scenarios and is a writing skill that can be used in many of your other courses once you understand how to develop the paper based on this format. Issue - What is the ethical consideration you found? Rules - From what you learned in this course, research and describe the rules that apply in the scenario you described. Analysis - 

Determine why you believe it is an ethical dilemma. Situational ethical analysis takes a systematic approach to figuring out what is the right, ethical, and or moral response to a situation. Lay out the situation above and using the tax information we learned in this course along with your own moral code of ethics, determine what you should do and how you should go about it. Conclusion - Given the issue identified in "Issue" above, tell me what you believe is the correct action and why you believe it is correct (ethical). Here you will write what you will do based on the above information. This should be a paragraph, not a one-word response. Once you have analyzed the situation, the issues, and the rules you know about, lay out your conclusion in a manner consistent with the information you've provided above.

What is your most efficient and moral choice and how will you go about it?

Answer rating: 100% (QA)

Issue The ethical consideration in the client situation revolves around the accuracy and legitimacy of the information provided by the clients for tax ... View the full answer