Reference no: EM13876688

Part 1

Ahi Corporation is one of your clients in Hawaii. The company had a good year last year and owes the IRS $100 million, due on March 15. There are no penalties or interest due to the IRS. One of Ahi's employees approaches you with the following plan to benefit from the so-called "float" on the large payment due to the government. First, Ahi Corp. will courier its tax return payment to the US Virgin Islands. There, the tax return will be mailed to the IRS service center in Fresno by certified mail on the returns due date, March 15. By doing this, the employee thinks that it will take at least six days for the tax return to reach the IRS and for them to cash the $100 million check. Ahi can earn 7% after tax on its money, so the interest earned during the six days because of the float is $19,178 per day ($100,000,000x0.07/365). Us, the total interest earned on the float for six days would be $115,068. ($19,178 x 6 days).

a) Would you recommend Ahi complete this transaction?

b) What potential ethics issues do you see in this situation?

Please write an essay explaining the answers to each question and your reasoning (properly sourced) for your answer to each question.

Part 2

Vincent Vineyard, MD, is a very successful physician in Temecula, CA. He earns approximately $800,000 per year from his medical practice. His two children have graduated from college and he and his wife now live alone. Vincent Jr. is an officer in the Navy and his daughter Valerie is an engineer in Texas. Vincent has had an interest in wine and grape growing for many years. Now, with more time to devote to other activities, Vincent recently started a winery with an initial investment of $1 million. Since the winery is new, he expects it to the 8 to 10 years before the winery makes a profit. Vincent would like your advice as to any potential tax problems he might have with his new winery investment.

Please answer the following questions:

a. What additional information might you want in this situation?

b. Where might that information come from?

c. Are all the given facts pertinent? Which, if any, are irrelevant?

d. What is the primary research question you would try to answer?

e. Are there any additional research questions you want to address? Explain.

Part 3

Helen Hanks, who lives in San Francisco, California, has just been promoted to manager of the divisional office. However, the divisional office is located in Portland, Oregon. Helen's significant other, Tom Hunt, will be moving with her to Portland. Helen's children from a previous marriage will also be joining her in Portland. The children have been living with their father in Spain for the past year.

Helen Easley sells the San Francisco house in which she and Tom live. Helen is the sole owner of the house. However, she has had a harder time finding the right home in Portland. Helen has to make several trips to Portland before buying a house under construction. It will not be available for occupancy for at least 20 days after she arrived in Portland. Tom accompanied Helen on the house hunting trips to give his opinion on the houses and to look for a new job.

The actual move takes place as follows. The movers arrive on Wednesday to pack up Helen's and Tom's household items. Thursday, the movers pack up Helen's items from a storage unit located outside of the city, and her sailboat. The movers then leave for Portland. Helen hires someone to drive her car to Portland. The driver leaves on Friday. On Saturday, after dropping Helen at the airport for her flight to Portland, Tom leaves and drives his car to Portland via Salt Lake City, Utah, where he visits his brother. Tom and Helen stayed in a hotel Wednesday through Friday while still in San Francisco and upon arriving in Portland until the house is ready for occupancy. The moving company stores their household items at its warehouse until Helen and calm are ready to move in. Helen's children arrive two weeks later after she and Tom have finally moved into the new house.

Helen pays for all of the costs involved in selling the San Francisco home and moving Tom, the children, and herself to Portland in November of the current year. Helen's employer eventually reimburses her (in March of next year) for 75% of all costs of moving to household items (Helen's and Tom's), Helen's car and the expenses of two of the house hunting trips. The employer also reimburses Helen for 50% of the total hotel and meal costs while she and calm were in Portland and waiting for the completion of their home.

Please advise Helen of the tax consequences of the above events. Please make sure to cite all relevant authorities that support your conclusions.

Part 4

Wesellwidgets.com is an online-based business that sells widgets throughout the United States and the world. It will ship with its upon order to all 50 United States and ships at least some widgets to each state during the course of the year 2013. The company is incorporated in the State of Delaware and has its principal place of business, including all of its warehousing and office space in the state of New York.

The owners of wesellwidgets.com ask you whether they have to pay sales tax on:

a. Widgets that are shipped to purchasers within New York state; and

b. Widgets that are shipped to purchasers in other states

Please write an essay that answers these questions, citing appropriate authority.

Part 5

Max and Annie are roommates sharing an apartment. Although they know each other well, they have respect for each other's privacy. That's, when Max's 2003 form 1040 was ordered by the IRS, he made no mention of the light to Annie. When Annie was clearing the answering machine that they shared, she heard the following message:

"Max, this is Richard, the IRS auditor. My figures show that you owe the government thousand dollars in taxes and another $4500 in penalties and interest."

When Annie brought up the message during dinner conversation that night, Max was serious. How could the IRS be so careless as to broadcast as news to a stranger? Didn't he have any privacy and confidentiality rights?

Max calls you to determine whether he might have a case against the IRS or Richard, the agent.

Please prepare an essay assessing Max's position and potential cause of action, if any.