Use case law, statutes, acts, etc. to make your point. Use RIA Checkpoint to find the relevant law. From the assignment: Prepare a tax memorandum for use in advising your client. State the issue(s) to be resolved and make sure to identify the specific authorities (code, statutes, case law etc.) that address your client’s tax issues. Make sure to weigh authorities both for and against your client’s position. Be sure to provide an analysis of why the code applies.
Question #2: Exceptions to the Statute of Limitations
Richard is a management consultant who specializes in strategic planning for businesses.
FACTS
1.
2.
3.
4.
5.
6.
7.
8.
During the last five months of 2021, Richard had a contract to do work for a major client,
Binglebongle Manufacturing. The contract stipulated that the company would pay the
majority of his fees at the conclusion of the engagement.
On December 31, 2021 Richard and the client went to lunch. The client was very pleased
with the work Richard had done and wanted to give him a check for his services.
Because Richard had received a large amount of income in 2021, he asked the client to
mail him the check instead. He told the client that Binglebongle Manufacturing would
still get the deduction, but he himself would not have to claim the income until the next
year.
Richard received the check in early January and included the amount in his 2022
income.
In 2024 the IRS audited Richard for unreported income.
a.
Binglebongle Manufacturing had issued a Form 1099-MISC showing that
the company made the payment in 2021.
b.
Richard tried to explain to the IRS that the income was not includable on
his return until 2022, because he was a cash-basis taxpayer and did not
receive the payment until 2022.
c.
Although it took the IRS agent some time to come up with the results of
his examination, he eventually submitted an examination report that
shifted the 2022 income to 2021.
Richard felt that he had complied with the law and did not agree with the revenue agent.
a.
He filed a protest to the IRS 30-day letter and asked for an appeals
conference.
b.
Appeals agreed with the IRS agent, but Richard was not deterred.
c.
Richard went to Tax Court in May of 2026.
d.
The Court ruled that since Richard received the income in 2021, it was
taxable in that year.
Since the Court had not ruled in his favor for 2021, Richard felt that he should be able
to get a refund from the IRS for the amount that he had included in his 2022 income.
a.
He filed Form 843, Claim for Refund and Request for Abatement.
b.
The IRS denied the claim request because the statute of limitations had
expired on the 2022 tax return.
Richard was frustrated with what appeared to be an inconsistency in the tax law. He
contacted a CPA, who told him that the IRS was correct: When Richard filed his claim
in May of 2026, the 2022 tax-year statute of limitations expiration date of April 15th
had already passed.
You are to write a memorandum to answer question#2, no more than 2 pages.
QUESTIONS
1.
2.
3.
4.
In determining if this taxpayer is entitled to a refund based on the facts in this case, what
code section(s) apply to the determination?
What do these code sections provide?
Are there tests that have to be met? If so what are they?
Does Richard meet them, and will he win? What is the support for your answer?
The question must be responded to in memo form (see pdf attached). The memo should not exceed 2
pages.
Tax Research Memo
Sample Format
Your Firm
Your Town and State
Date
Relevant Facts
Specific Issues
Conclusions
Support
Actions to Be Taken
________ Discuss with client. Date discussed ________
________ Prepare a memo or letter to the client
________ Explore other fact situations
________ Other action. Describe:___________________________
_______________________________________________________
Preparer ________
Reviewer ________
Partner ________
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Formatting
Title Page
Citation
Outline
