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Tax Research and Planning

A. Explain the role of tax planning in the business environment. In writing this explanation, focus on the four maxims of tax planning (1. Tax costs decrease (and cash flows increase) when income is generated by an entity subject to a low tax rate. 2. In present value terms, tax costs decrease (and cash flows increase) when a tax liability
is deferred until a later taxable year. 3. Tax costs decrease (and cash flows increase) when income is generated in a jurisdiction with a low tax rate. 4. Tax costs decrease (and cash flows increase) when income is taxed at a preferential rate because of its character).
and the six steps in tax law research (Step 1: Understand the Client's Transaction and Ascertain the Facts, Step 2: Identify the Tax Issues, Problems, or Opportunities Suggested by the Facts and Formulate Specific Research Questions, Step 3: Locate Relevant Tax Law Authority, Step 4: Analyze Relevant Authority and Answer the Research Questions, Step 5: Repeat Steps 1 through 4 as Many Times as Necessary! And Step 6: Document Your Research and Communicate Your Conclusions)

B. Briefly evaluate the three tax research sources you identified and recommend the one you consider the best.

C. Analyze the role of ethics in tax planning. In particular, think about the differences between tax avoidance and tax evasion

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A. Explain the role of tax planning in the business environment. In writing this explanation, focus on the four maxims of tax planning (1. Tax costs decrease (and cash flows increase) when income is generated by an entity subject to a low tax rate. 2. In present value terms, tax costs decrease (and cash flows increase) when a tax liability is deferred until a later taxable year. 3. Tax costs decrease (and cash flows increase) when income is generated in a jurisdiction with a low tax rate. 4. Tax costs decrease (and cash flows increase) when income is taxed at a preferential rate because of its character).
and the six steps in tax law research (Step 1: Understand the Client's Transaction and Ascertain the Facts, Step 2: Identify the Tax Issues, Problems, or Opportunities Suggested by the Facts and Formulate Specific Research Questions, Step 3: Locate Relevant Tax Law Authority, Step 4: Analyze Relevant Authority and Answer the Research Questions, Step 5: Repeat Steps 1 through 4 as Many Times as Necessary! And Step 6: Document Your Research and Communicate Your Conclusions)

In the business environment, it is essential that each company considers the tax planning. As we know, income tax expense is one of the expenses which have the impact the company's margin and profitability. Furthermore, it is also one of the expenses, which is controllable by the company through the use of tax planning, in order to reduce the tax expenses to be paid by the company and at the same time to increase the profitability of the company.

Founders of a new business generally realize early on that they need to conduct the business through some kind of legal entity to limit their personal liabilities for the debts and obligations the business generates. Often, the three entity types from which the founders must choose are the "C" corporation, the "S" corporation and the limited liability company (or "LLC"). While all three entity types insulate the founders from personal liability, the differences among ...

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