...Performance Management at Perelson Weiner LLP1 Jan Bell Babson College Alfred J. Nanni, Jr Babson College Introduction and entrepreneurs. (See Exhibit 3 for a description of PW’s business.) PW’s business development is relationship-based; the firm doesn’t advertise for business. Instead, personnel develop long-term relationships with clients. These relationships typically start with tax return or financial statement preparation and then grow to include services that provide value to the client in other ways. Weiner explains his client focus this way: “We don’t seek short-term transactional services; we want to spend our time developing client relationships that last 40 years rather than seeking one-time opportunities.” To ensure that clients receive value from PW’s services, Weiner insists that personnel have unique expertise before offering services to clients. PW’s expertise and its ability to add unique value lie in providing traditional tax preparation, accounting, and auditing services, which are then enhanced by meaningful proactive business and tax consulting advice. Weiner has made a strategic decision to focus on these sources of client value plus one other sort of advice. With a New York City location, Weiner feels that PW can also add value for its clients by assisting them in the selection of the best specialized professional service firms in other areas. For example, PW personnel help clients find the best asset management firms and...
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...Introduction: H&R Block (H&R) is a leading company in tax preparation industry. Risk management is very important in the competitive tax service industry. The purpose of this report is to analyze H&R's macro- environment using STEEP model and identify the potential threats. Social: According to statistic Canada, the death rate will be over birth rate in the following years. Less population will results in less requirements to file tax return. Another factor which can't be ignored is immigration. Statistic Canada predicted that before year 2056, immigrant will be the main source of annually 1% population growth. This will create a demand for bi-lingual employee who can speak the immigrants' native language. Also, the components of the immigration is very important. For example, the company needs to train staff regarding foreign income in an area with a lot of investment immigrants. Re-target market segment is very important for H&R, especially in a city like Toronto. Technological: During the recent years various software make DIY tax filing very convenient and less expensive. To compete with this, H&R developed their own software and put them on the market. After years of development, "block at home" is one of the leading software on the market. But with more and more free software emerging, H&R block still face severe competence. To maintain their tradition tax service competitive advantage, H&R guaranteed that company will reimburse the penalty and interest from CRA...
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...citizens will get benefit from. Through taxation, manpower needed for economic development is supplied and the gains of such undertaking are expected to improve the quality of human life. The increase of population and the decrease of resources burden government with economic problem which can and shall ultimately pose danger to the peace and order condition of the community, country or nation. In the Philippines the tax department, popularly known as Bureau of Internal Revenue (BIR), is under the support of the Department of Finance. The tax department has enormous and wide ranging administrative and legislative powers when it comes to assessment, enforcing taxes and collection. It is considered to be the main revenue earning agency for the government of Philippines. Annually the bureau collects practically 80 percent of the total generated revenue. The BIR has monthly and annual targets for collection and this is determined by the Development Budget and Coordinating Council, which is an inter-agency council headed by the Department of Budget and Management. Today tax payers can directly pay taxes either to the BIR using channels like RDOs or authorized banks. In the Philippines, individual tax returns have to be filed by April 15 of the following year for the previous calendar year. There is the option of paying and filing taxes electronically using the Internet banking through Electronic Filing and Payment System (EFPS). This system was introduced in 2001. The Philippine...
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...CHAPTER 2 TAX ADMINISTRATION Problem 2 – 1 TRUE OR FALSE 1. True 2. False – not the BIR, but the Department of Finance 3. False – the BIR is responsible to collect national taxes only. 4. False – The review shall be made by the Court of Justice. 5. True 6. True 7. False – The Secretary of Justice and the Courts also interprets the provisions of the Tax Code. 8. False – the fact that taxes are self-assessing the BIR assessment is necessary to ensure the reliability of the ITR. 9. False – the BIR or the Government is not allowed by law to appeal to the CTA. (Acting Collector of customs vs. Court of Appeals, Oct. 31, 1957) 10. True 11. False – Appeal to the SC shall be made within 15 days from the receipt of the decision of the CTA. 12. False – the CIR can conduct a jeopardy assessment when there are no accounting records. 13. True 14. False – the taxpayer needs to waive first his right on the secrecy of bank deposits before BIR can inquire into his bank deposits. 15. True Problem 2 – 2 TRUE OR FALSE 1. False – there must be a Letter of Authority. 2. False – the supporting documents must be submitted to the BIR within 60 days from the date a protest is filed. 3. True 4. True 5. False – destraint as a tax collection method is applicable only to personal property. 6. False – criminal violations already filed in court are not subject to compromise. 7. True 8. False, collection must be within 5 years 9. True 10...
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...Solutions to Problems 1-45, 1-47, 2-67 &2-68 As for problem 1-45, Paul did not meet his entire obligation to the IRS in 2011. Hi had a tax liability of $32,817 and he was withheld $27,198 therefore owing the IRS $5,619. But Paul did not pay the $5,619 with his tax return and rather opted to pay 8 month later without asking for an extension. Therefore Paul faces a penalty and possible interest charges for the unpaid tax liability of $5,619. The penalty could be 0.5% per month (or fraction thereof) up to a maximum of 25% for failure to pay the taxes that where due. If Paul penalty would have been 0.5% the amount owed would be $7,866.60 {$5,619 + $2247.60 (5,619*0.05*8)} or could be up to a maximum of $16,857 {$5,619 + $11,238 (5,619*0.25*8)}. Also the IRS could impose an interest charge per day of 3%, as of the last interest table (interest change every 3 month). As for problem 1-47 the IRS can audit Dan tax return but they have to meet certain criteria. The IRS has a 3 year statute of limitation but there are 3 exceptions to that limitation: * The IRS has six years from the date a return is filed to audit a tax return and to assess additional tax if the taxpayer omits income that amounts to more than 25% of income that was reported on the tax return. * The IRS also has six years to audit a tax return and assess additional tax on income related to undisclosed foreign financial assets if the omitted income is more than $5,000. * The statute of limitations on audits...
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...Reuters | ONESOURCE SALE & USE TAX | Table of Content Brief Overview of Company ……………………………………………………………………… 3 Problem to Be Resolved ………………………………………………………………………… 4 Proposed Enterprise Technology ……………………………………………………………… 4 Implementation / Timeline ……………………………………………………………………… 6 Operations Management ………………………………………………………………………… 7 Risks ………….…………………………………………………………………………………… 7 Benefits …………………….………………………………………………………………………… 8 How to Measure Success ..………………………………………………………………………… 10 Bibliography …………………………………………………………………………………… 12 A.) Brief Overview of the Company or Enterprise Ultra Stores, Inc. was founded in 1997 by CEO Daniel Marks it’s based in Chicago Illinois. The company was formerly known as Ultra of Illinois, Inc. and changed its name to Ultra Stores, Inc. in November 1997. Ultra Stores, Inc. operates as a specialty retailer of fine jewelry; they manufacture and import diamonds, gemstones, and gold jewelry. The company also offers platinum, silver, titanium, tungsten, cubic zirconia, moissanite, and pearls. The company operates 163 stores in more than 40 states, they employ between 500 – 1000 employees. The company is privately held Chicago investment firm Crystal Capital owns a majority stake in Ultra Stores. Below is the organization hierarchical: Revenues and expenses are expected to increase on average by 4% and 3%. Below is the estimated profit for the next four years. B.) Problem to be resolved Currently we have...
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...Chapter 16 Problem 16–1 Requirement 1 Related Asset – Cumulative Balance (not required) ($ in thousands) Collections Service Revenue Service previous current Receivable Revenue year year Balance 2012 $30 2013 $750 30 740 10 2014 715 10 690 25 2015 700 25 695 5 Problem 16–1 (continued) ($ in thousands) Current Future Year Taxable 2013 Amount Pretax accounting income 250 Temporary difference: 2012 services (30) 30 2013 services (10) 10 Taxable income (income tax return) 270 Enacted tax rate 40% 40% Tax payable currently 108 Deferred tax liability 4 ( Deferred tax liability: Ending balance (balance currently needed) $ 4 Less: Beginning balance: ([$650 – 620] x 40%) (12) Change needed to achieve desired balance $ (8) Journal entry at the end of 2013 Income tax expense (to balance) 100 Deferred tax liability (determined above) 8 Income tax payable (determined above) 108 Problem 16–1 (continued) Requirement 2 ($ in thousands) Current Future Year Taxable 2014 Amount Pretax accounting income 220 Temporary difference: 2013 services (10) 10 2014 services (25) 25 Taxable income (income tax return) 205 Enacted tax rate 40% 40% Tax payable currently 82 Deferred tax liability 10 ( Deferred tax liability: Ending balance (balance...
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...I:1-1 The Supreme Court held the income tax to be unconstitutional in 1895 because the income tax was considered to be a direct tax. At that time, the U.S. Constitution required that an income tax be apportioned among the states in proportion to their populations. This type of tax system would be extremely difficult to administer because different rates of tax would apply to individual taxpayers depending on their states of residence. p. I:1 2. I:1-2 The pay-as-you-go withholding was needed in 1943 to avoid significant tax collection problems as the tax base broadened from 6% of the population in 1939 to 74% in 1945. Pay as you go permitted the federal government to deduct taxes directly out of an employee's wages. p. I:1-3. I:1-3 Under a progressive tax rate structure, the tax rate increases as the taxpayer's income increases. Currently, for 2011, tax rates of 10%, 15%, 25%, 28%, 33% or 35% apply depending upon the taxpayer's filing status and taxable income levels. Under a proportional tax rate or "flat tax" structure, the same tax rate applies to all taxpayers regardless of their income levels. Under a regressive tax rate structure, the tax rate decreases with an increase in income level. The concept of vertical equity holds that taxpayers with higher income levels should pay a higher proportion of tax and that the tax should be borne by those who have the "ability to pay." Thus, Congressman Patrick's opposition to the flat tax is theoretically correct; all taxpayers...
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...CHAPTER 5 ITEMIZED DEDUCTIONS DISCUSSION QUESTIONS AND PROBLEMS Discussion Questions 1. What is the difference between deductions from AGI and deductions for AGI? Answer: For AGI expenditures are outflows made for the production of income or for a trade or business and are included in the calculation of adjusted gross income. From AGI deductions are primarily personal expenditures that are allowed to reduce taxable income. 2. What are the six types of personal expenses that can be classified as itemized deductions on Schedule A, Form 1040? Answer: Personal expenses allowed as itemized deductions include medical expenses, state and local taxes, interest, charitable gifts, casualty losses, and miscellaneous deductions. 3. Describe the concept of a 7.5% floor for medical deductions. Answer: The 7.5% floor means that medical expense deductions are not allowed until the total medical deductions exceed 7.5% of AGI. Thus, medical expenditures, net of insurance reimbursements, must be substantial in order to gain any tax benefit. 4. Can an individual get a medical deduction for a capital improvement to their personal residence? If so, how is it calculated? Answer: For medical capital expenditures that improve the taxpayer's property, the deduction is available only to the extent that the medical expenditure exceeds the increase in the FMV of the residence. 5. What are the general requirements...
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...IRS Statute of Limitations Does the Clock Ever Run Out on the IRS Collecting Tax Debt? YES. While it may seem like it, and the IRS has little or no interest in telling you differently, in fact the IRS does NOT have an unlimited time to collect tax debt from you. The IRS does not have the legal author-ity to collect tax debt that is more than ten years old. This is useful information for any tax debt out-standing for more than 10 years, or about to be that old; and useful to think about if you are going to structure a payment plan for tax debt to be paid off over a period of years. [Learn More] [Learn More] The key date to determine is the “Collection Statute Expiration Date” for the various el-ements of your tax debt. If you owe back...
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...Prison Inmates claiming millions in tax refund Over the past few years prisoner tax refund fraud has sky rocketed. According to the article - (Prisoners rake in millions from tax fraud, 2013) “In 2010, more than 91,000 inmate returns claimed $759 million in fraudulent refunds.” 1 That figure was more than double from the previous year. How is it a convicted felon who is behind bars still gets to cheat the system by robbing innocent tax payers of billions in tax refunds on an annual basis? This type of white collar crime is easily committed, all that is needed is the use of a computer with internet access and a great deal of time which a prisoner is in no shortage of having. They can educate themselves on how to hack into hundreds of databases that contains people’s personal information including social security numbers. Once that information is gathered they can begin the process of stealing tax refunds they are certainly not due by filing fraudulent income tax forms, sometimes hundreds at a time by using legitimate names and social security numbers, sometimes the names of their inmates, relatives or even people who are deceased. It is the duty of the IRS to fix this problem. This paper will highlight a few cases of inmate tax refund fraud and what measures the IRS has taken and will continue to take in order to protect innocent victims against this type of fraud. Case summaries involving inmate tax refund fraud The following cases are classic examples of...
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...project passes a preset hurdle, such as a 15% rate of return. Capital budgeting preference decisions are concerned with choosing from among two or more alternative investment projects, each of which has passed the hurdle. 14-2 The “time value of money” refers to the fact that a dollar received today is more valuable than a dollar received in the future. A dollar received today can be invested to yield more than a dollar in the future. 14-3 Discounting is the process of computing the present value of a future cash flow. Discounting gives recognition to the time value of money and makes it possible to meaningfully add together cash flows that occur at different times. 14-4 Accounting net income is based on accruals rather than on cash flows. Both the net present value and internal rate of return methods focus on cash flows. 14-5 Discounted cash flow methods are superior to other methods of making capital budgeting decisions because they give specific recognition to the time value of money. 14-6 Net present value is the present value of cash inflows less the present value of the cash outflows. The net present value can be negative if the present value of the outflows is greater than the present value of the inflows. 14-7 One simplifying assumption is that all cash flows occur at the end of a period. Another is that all cash flows generated by an investment project are immediately reinvested at a rate of return equal to the discount rate. 14-8 No. The cost of capital...
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...Managerial Finance Important Exercises and Problems for the Final Prepared by Lody Previous Final Exam Qs BMMF Final Exam 2010 Part 1 : answer the first two questions then choose 2 only Q1 - the same as question (13-10) & (13-8) - [15 mark] Q2 - he gave us some equations and asks us to find : [10 marks] (a) the sales using 3 formulas , i think first we used Current Ration to find Total Liability , then Quick Ratio to find Inventories then Inventory turnover to get the sales (b) the DSO first we must find the Receivables = Total assets - (cash & short-term investments + inventories) then find the DSO = Receivables / sales / 365 Q3- [7.5 marks] (a) define LRP (b) similar question to 1-4 Q4- [7.5 marks] the same question as 6-1 Q5- [7.5 marks] the same question as ST-1 from chapter 10 Part 2 : answer only 2 questions Q1- what are the key features bond ? and Discuss The relationship between Coupon interest and Market interest? Q2- - What are the differences between Systematic risk and Unsystematic risk ? - Define Standard Diviation - Q3- what is the difference between Independent & Mutualy Exclusive projects , give example of each Contents Interest Rate calculation6 Problem 1-1 (Expected Rate of Interest) page 426 Another clear answer: (1-1)7 Problem (1-2) page 42, Default Risk Premium8 ...
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...program and download updated sample tax returns and Cases when the updated ProFile software is available in January, 2009 A “Guide to Using Your Student CD-ROM" How To Work Through Chapter One We recommend the following approach in dealing with the material in this chapter: The Canadian Tax System r Read the text pages 1 - 3 (paragraph 1-1 through 1-11). r Complete Exercise One-1 on page 3 of the text. The solution is on page S-3 of this Study Guide. All solutions to Exercises and Self Study Problems and Cases can be found in this Study Guide and the page numbers all start with the prefix S-. Read the text pages 3 - 4 (paragraph 1-12 through 1-16). Complete Exercise One-2 on page 4 of the text. The solution is on page S-3. Read the text pages 4 - 5 (paragraph 1-17 through 1-22). r r r Tax Policy Concepts r Read the text pages 5 - 6 (paragraph 1-23 through 1-25). r r r r Complete Exercise One-3 on page 6 of the text. The solution is on page S-3. Complete Self Study Problem One-1 on page 30 of the text. The solution is on page S-4. Read the text pages 6 - 7 (paragraph 1-26 through 1-31). Complete Self Study Problem One-2 on page 30 of the text. The solution is on page S-4. Canadian Tax Principles 2008/2009 - Study Guide S-1 How To Work Through Chapter One r r Read the text pages 7 - 10 (paragraph 1-32 through 1-40). Complete Self Study Problem One-3 on page 30 of the text. The solution is on pages S-4 and S-5. Income Tax Reference...
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...Chapter 01 An Introduction to Tax SOLUTIONS MANUAL Discussion Questions (1) [LO1] Jessica’s friend Zachary once stated that he couldn’t understand why someone would take a tax course. Why is this a rather naïve view? Taxes are a part of everyday life and have a financial effect on many of the major personal decisions that individuals face (e.g., investment decisions, evaluating alternative job offers, saving for education expenses, gift or estate planning, etc.). (2) [LO1] What are some aspects of business that require knowledge of taxation? What are some aspects of personal finance that require knowledge of taxation? Taxes play an important role in fundamental business decisions such as the following: * What organizational form should a business use? * Where should the business locate? * How should business acquisitions be structured? * How should the business compensate employees? * What is the appropriate mix of debt and equity for the business? * Should the business rent or own its equipment and property? * How should the business distribute profits to its owners? One must consider all transaction costs (including taxes) to evaluate the merits of a transaction. Common personal financial decisions that taxes influence include: choosing investments, retirement planning, choosing to rent or buy a home, evaluating alternative job offers, saving for education expenses, and doing gift or estate planning. ...
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