Requirements for Tax Research Paper

Tax Research Paper This research paper is worth 30% of your grade.  Each of these elements of the tax research paper will receive an equal weight, one fifth of the total points each. Due Date: Thursday June 6.  

Establish the Facts

Identify the issues – This may call for additional facts to be established. Locate Authority – this may raise additional issues or the     need   for additional facts. Evaluate Authority – this may raise additional issues or a     need   for additional facts. Develop Conclusions and Recommendations. Points   Will be awarded for:  

1. Clear and concise writing.

1. Clear and logical analysis.

1. Consideration of the major sources of tax authority on the topic and your analysis of the weight of these authorities.

  Facts:   You should rewrite these to the extent necessary to be clear and concise.  Note that one sixth of your grade is achieved with minimal effort to state the facts.  

1. A client is in the business of developing high end telecommunication systems, hardware and software, allowing information to travel more seamlessly through the fiber optic cable networks.

2. Research and development efforts are generally financed through:

  Source A: Venture capital contributions of cash to the company to advance the company’s intellectual portfolio for development of commercial products to be sold to companies that service the fiber optic networks and provide equipment to telecommunication companies.   Source B: United State government research contracts that fund company research.  The intellectual property developed is licensed to the Unites States government on a royalty free and non-exclusive basis.   The company can use the intellectual property for its own commercial purposes as described in 1.   Source C: Commercial contracts to help individual customers apply the company’s technology for that particular customers own purposes.  Neither the company nor its customers understand how to resolve technical uncertainties without further scientific and engineering work as specified in the contracts.  

3. The United State government contracts are “cost plus” contracts whereby the company is paid for its direct expenses allocable to the contracts, plus a share of its overhead that is allowable pursuant to the federal acquisition regulations (FAR). Assume that the company incurs 20 cents of overhead for every one dollar of direct cost.

4. For 2024, the company expects to spend the following costs (000’s) financed by the financing sources above:

  For 2026, the company determines that its category C costs have no future commercial value due to design changes in 2025 and 2026  to all of its commercial products that make all of its work for customers in 2024 obsolete.   Footnote A:  In a typical government contract, the government posts information about an issue it would like studied, and typically awards 25-35 contracts for $50,000 to $100,000 each.  This is typically “Phase I”.  The companies typically get paid their $50,000 to $75,000 just by submitting their preliminary results/reports, good, bad or ugly.   The government then will award a small number of Phase II contracts, typically for several hundred thousand dollars each.  At the end of Phase II, the contractor delivers reports, samples, drawing and the like to the government.  The contractor owns this “intellectual property” and has the right to use the property for any purpose.  Typically, the company will use the IP to develop its own products or processes, and or to sell or license the IP to other companies to generate revenue.  The government is given a “non-exclusive” license meaning the government can use the IP, but that so can others including the Company or other licensees of the Company.  The government does not make royalty payment for use of the license.   The important point for Source B funding is that the Company has rights to intellectual property it developed.   Footnote B- In 2024, the Company developed intellectual property for the use of its non-government customers (Funding Source C).  IF the Company is required to capitalize the costs associated with this work, then the Company will have an amortizable asset on its books for income tax purposes.  That amortizable asset per the facts has no further value to the Company by the end of 2026 per the facts.  The IP may have value still to the customer.   Locally, most of the high tech companies survive by making their products obsolete in a very short time.  Otherwise, bigger companies will copy the technology and steal the market.  The cost of defending the IP from encroachment from bigger companies is astronomical.  So, our small local companies protect themselves by moving their product development faster than bigger companies can copy.  Local camera companies (infrared, endoscopic- tiny cameras inserted into your body for diagnosis or to guide a surgeon) are world leaders and have been making their products obsolete for every one of the nearly forty years that I have lived here.  So, the fact pattern that the IP developed by the Company in 2026 is obsolete by 2026 is common rather than unusual.   Issues Note that another sixth of the points on this assignment are earned by concisely restating the issues.  

1. Are the direct expenses in Funding Source C research and development that must be capitalized pursuant to IRC Section 174 as amended by the 2017 tax act?

2. Regardless of your conclusion to issue 1, if the Funding Source C direct costs must be capitalized, mut the company capitalize overhead related to Category C direct costs, and if so, how much.

3. Regardless of your conclusion to issue 1, how are capitalized costs recovered?

4. Can the company write-off the unrecovered portion of its capitalized Funding Source C costs in 2026?

  Footnote C:  For clarity whether or not you determine in question 1 that Funding Source C costs should or should not be capitalized, you must answer questions 2, 3 and 4, as if the costs had been capitalized.   What You Must Consult  

1. IRC Section 174.

2. Regulation Section 1.174-2

3. Proposed Reg 1.174-2

4. Only after you have read and analyzed the three documents above:

1. Use Google or another search engine but not Chat GTP to find one or more scholarly articles that address these topics. You need not have more than one.

1. If there are any citations in the scholarly article that address the issue, read those.

  Note, that everything in your paper that comes from a source whether authoritative or not, must have a citation.   What You Are Permitted to Do?  

1. Work collaboratively with other members of the class except as to writing your paper.

2. Ask me for clarification of any facts. If a clarification is helpful, please remind me to make the clarification in class for everyone and to update these instructions.

3. Only if you have already consulted the sources per 1 to 4 (What You Must Consult) above and formed a preliminary conclusion, you may concisely in office hours or in email tell me your preliminary thinking and ask for confirmation and or guidance.

4. If you are having trouble reading the documents above, you can come to me for help in office hours only.

5. As in 3, if you know another tax professional, you can share thinking with them.

  What You Are Not Permitted To Do?

1. Consult CHAT GTP.
2. Have anyone else write your paper.
3. Wait until the last minute or expect me to help you at the last minute if you are just getting started. My offer to help is at my complete and sole discretion.

Note that you are planning to enter a profession with a code of ethics, and I expect everyone to follow these rules, and ask if they are not sure. I will assign a grade of zero to anyone that in my complete and sole discretion has violated these three rules. My goal is not to be punitive, though I will be. My goal is to help you become a professional. Due Date: Thursday June 6. 30 points extra credit for turning in the paper on May 31.   

ADDITIONAL INSTRUCTIONS FOR THE CLASS – Tax Research Paper

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• Discussion Questions (DQ)

Initial responses to the DQ should address all components of the questions asked, including a minimum of one scholarly source, and be at least 250 words. Successful responses are substantive (i.e., add something new to the discussion, engage others in the discussion, well-developed idea) and include at least one scholarly source. One or two-sentence responses, simple statements of agreement or “good post,” and responses that are off-topic will not count as substantive. Substantive responses should be at least 150 words. I encourage you to incorporate the readings from the week (as applicable) into your responses.

• Weekly Participation

Your initial responses to the mandatory DQ do not count toward participation and are graded separately. In addition to the DQ responses, you must post at least one reply to peers (or me) on three separate days, for a total of three replies. Participation posts do not require a scholarly source/citation (unless you cite someone else’s work). Part of your weekly participation includes viewing the weekly announcement and attesting to watching it in the comments. These announcements are made to ensure you understand everything that is due during the week.

• APA Format and Writing Quality

Familiarize yourself with the APA format and practice using it correctly. It is used for most writing assignments for your degree. Visit the Writing Center in the Student Success Center, under the Resources tab in Loud-cloud for APA paper templates, citation examples, tips, etc. Points will be deducted for poor use of APA format or absence of APA format (if required). Cite all sources of information! When in doubt, cite the source. Paraphrasing also requires a citation. I highly recommend using the APA Publication Manual, 6th edition.

• Use of Direct Quotes

I discourage over-utilization of direct quotes in DQs and assignments at the Master’s level and deduct points accordingly. As Masters’ level students, it is important that you be able to critically analyze and interpret information from journal articles and other resources. Simply restating someone else’s words does not demonstrate an understanding of the content or critical analysis of the content. It is best to paraphrase content and cite your source. Tax Research Paper

• LopesWrite Policy

For assignments that need to be submitted to Lopes Write, please be sure you have received your report and Similarity Index (SI) percentage BEFORE you do a “final submit” to me. Once you have received your report, please review it. This report will show you grammatical, punctuation, and spelling errors that can easily be fixed. Take the extra few minutes to review instead of getting counted off for these mistakes. Review your similarities. Did you forget to cite something? Did you not paraphrase well enough? Is your paper made up of someone else’s thoughts more than your own? Visit the Writing Center in the Student Success Center, under the Resources tab in Loud-cloud for tips on improving your paper and SI score.

• Late Policy

The university’s policy on late assignments is a 10% penalty PER DAY LATE. This also applies to late DQ replies. Please communicate with me if you anticipate having to submit an assignment late. I am happy to be flexible, with advance notice. We may be able to work out an extension based on extenuating circumstances. If you do not communicate with me before submitting an assignment late, the GCU late policy will be in effect. I do not accept assignments that are two or more weeks late unless we have worked out an extension. As per policy, no assignments are accepted after the last day of class. Any assignment submitted after midnight on the last day of class will not be accepted for grading.

• Communication

Communication is so very important. There are multiple ways to communicate with me: Questions to Instructor Forum: This is a great place to ask course content or assignment questions. If you have a question, there is a good chance one of your peers does as well. This is a public forum for the class. Individual Forum: This is a private forum to ask me questions or send me messages. This will be checked at least once every 24 hours. Tax Research Paper

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