Sarah is a local CPA who performs part-time bookkeeping services for local businesses and does tax returns during tax season. Sarah does not know about the AICPA Code of Conduct or the IRS Circular 230. Draft a memo for your files and an email to Sarah to answer the questions below:

1. Explain what parts of the AICPA Code of Conduct apply to Sarah?

2. Explain what parts of the IRS Circular 230 apply to Sarah?

 

 

Phil Heart is a professional poker player. He is one of the best of all time.  For the past several years he has been successful in Las Vegas. Unfortunately, last year was not a great year.  Phil won money in some poker tournaments of $&360,000 but he lost over $520,000. The other info on his tax return included: $5,000 in travel expenses, $21,000 in tournament admission fees, and $180,000 in investment income. Phil does not believe that he owes anything in taxes because of this great amount of losses, but he wants you to run his numbers and give him some advice. Draft a memo for your files and an email to Phil to give him advice on his taxes and answer the following questions below.

1. Identify the relevant IRS code section, regulations and at least one court case that is relevant to Phi Heart's situation. 

2. Let Phil know if he is correct and that his losses are greater than his expenses so he owes no taxes Please show your work!

Answer rating: 100% (QA)

Mem o This memo is to document the advice given to Phil Heart regarding his tax situation Phil had reported a net loss of 360 000 from poker tournamen... View the full answer