ROBY B. SAWYERS AND STEVEN L. GILL, FEDERAL TAX RESEARCH 13E, 2025,

Federal Tax Research 13e Roby Sawyers, Steven Gill (Solu�ons Manual All Chapters, 100% Original Verified, A+ Grade) 1 / 4

Solution and Answer Guide: Roby B. Sawyers and Steven L. Gill, Federal Tax Research Edition: 13 2025, 9780357988411;

Chapter 1: Introduction to Tax Practice and Ethics

1 © 2025 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.Solution and Answer Guide

ROBY B. SAWYERS AND STEVEN L. GILL, FEDERAL TAX RESEARCH 13E, ©2025,

9780357988411; CHAPTER 1: INTRODUCTION TO TAX PRACTICE AND ETHICS

TABLE OF CONTENTS

Discussion Questions........................................................................................................... 1 Exercises ............................................................................................................................ 21

DISCUSSION QUESTIONS

• In a modern, industrial society, the tax system is derived from several

disciplines. Identify the disciplines that play this role in the United States.Explain how each of them affects the U.S. tax system.

Answer: In the United States, the tax system is an outgrowth of the

following five disciplines: law, accounting, economics, political science, and

sociology. The environment for the tax system is provided by the principles of economics, sociology, and political science, while the legal and accounting fields are responsible for the system’s interpretation and application.Each of these disciplines affects this country’s tax system in a unique way.Economists address such issues as how proposed tax legislation will affect the rate of inflation or economic growth. Measurement of the social equity of a tax and determining whether a tax system discriminates against certain taxpayers are issues that are examined by sociologists and political scientists. Finally, attorneys are responsible for the interpretation of the taxation statutes, and accountants ensure that these same statutes are applied consistently.Page 4 2 / 4

Solution and Answer Guide: Roby B. Sawyers and Steven L. Gill, Federal Tax Research Edition: 13 2025, 9780357988411;

Chapter 1: Introduction to Tax Practice and Ethics

2 © 2025 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

• The elements of tax practice fall into what major categories in addition to

tax research?

Answer: The other major categories of tax practice in addition to tax

research are as follows:

• Tax compliance • Tax planning • Tax litigation Page 5

• What is tax compliance as practiced in the United States? Give several

examples of activities that can be classified as tax compliance.

Answer: Tax compliance consists of gathering pertinent information,

evaluating and classifying that information, and filing any necessary tax returns. Compliance also includes other functions necessary to satisfy governmental requirements, such as representing a client during an Internal Revenue Service (IRS) audit.Page 5

• Several groups of individuals do most of the tax compliance work in the

United States. Identify these groups and briefly describe the kind of work that each group does. In this regard, be sure to define the term enrolled agent.

Answer: Most of the tax compliance work is performed by commercial tax

preparers, enrolled agents (EAs), attorneys, and certified public accountants (CPAs). Commercial tax preparers often complete noncomplex individual, partnership, and corporate tax returns. EAs, attorneys, and CPAs usually perform the preparation of more complex returns. The latter groups also provide tax planning services and represent their clients before the IRS.

An EA is admitted to practice before the IRS by passing a special IRS- administered examination, or who has worked for the IRS for five years and is issued a permit to represent clients before the IRS. CPAs and attorneys are not required to take this examination and are automatically admitted to practice before the IRS if they are in good standing with the appropriate professional licensing board.Page 5 and Circular 230

• What is tax planning? Explain the difference between tax evasion and tax

avoidance and the role of each in professional tax planning. 3 / 4

Solution and Answer Guide: Roby B. Sawyers and Steven L. Gill, Federal Tax Research Edition: 13 2025, 9780357988411;

Chapter 1: Introduction to Tax Practice and Ethics

3 © 2025 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Answer: Tax planning is the process of arranging one’s financial affairs to

minimize any tax liability. Much of modern tax practice centers around this process, and the resulting outcome is tax avoidance. There is nothing illegal or immoral in the avoidance of taxation as long as the taxpayer remains within legal bounds. In contrast, tax evasion constitutes the illegal nonpayment of a tax and cannot be condoned. Activities of this sort clearly violate existing legal constraints and fall outside of the domain of the professional tax practitioner.Pages 5–6

• Tax planning falls into two major categories: the “open” transaction and the

“closed” transaction. Discuss each type of transaction and describe how each affects tax planning.

Answer: In an open tax planning situation, the transaction is not yet

complete; therefore, the tax practitioner maintains some degree of control over the potential tax liability, and the transaction may be modified to achieve a more favorable tax treatment. In a closed transaction, however, all of the pertinent actions have been completed, and tax planning activities may be limited to the presentation of the situation to the government in the most legally advantageous manner possible.Page 6

• What is tax litigation? What type of tax practitioner typically handles tax

litigation on a taxpayer’s behalf?

Answer: Tax litigation is the process of settling a dispute with the IRS in a

court of law. Typically, a tax attorney handles tax litigation that progresses beyond the final IRS appeal.Page 6

• In tax litigation, what is usually the role of a CPA?

Answer: CPAs typically serve in a support capacity in tax litigation.

Page 6

• Define tax research. Briefly describe the tax research process.

Answer: Tax research consists of the resolution of unanswered taxation

questions. The tax research process includes the following:

• Identification of pertinent issues;
• Specification of proper authorities;
• Evaluation of the propriety of authorities; and,
• Application of authorities to a specific situation.

Page 6

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