Requirements: 1-2 paragraphs?   |   .doc file

Acc 460e MEMO – ‘21sp

AIco, a private company (not a public company), made a two-year employment contract to attract Yoshi as its Chief Compliance Officer. Each year under the contract, Aico will pay Yoshi $200,000 cash and 500 Crypto R units (a cryptocurrency). In July 2017, at the time of the signing, each unit of Crypto R was worth $100. AIco had acquired 1,000 Crypto R units in 2017 at $100. In 2018, during the first year of the contract, each unit of Crypto-R increased to an average of $200. Thus, in 2018 Aico deducted $400,000 of compensation for Yoshi. In 2019 (the second year of the contract), each unit of Crypto R soared to $8,000. Thus, in 2019, Yco’s deducted $4,200,000 in compensation for Yoshi. The IRS reduced AIco’s deduction in both 2018 and 2019 to $250,000 per year, disallowing any compensation above that amount. The IRS believed that each year Aico had effectively sold 500 shares of Crypto R.

AIco had self-reported tax liabilities on its 2019 returns but did not pay them. The IRS was attempting to collect about $270,000 when it sent Yoshi a Collection Due Process (CDP) notice in April 2020. AIco timely requested a CDP hearing, but blew off attending the hearing. However, AIco was given a second chance in the form of an additional two weeks after the scheduled hearing. AIco said it did not believe it was proper to collect any taxes until the Covid-19 Pandemic was over, when AIco was located in a federally declared disaster area.

INSTRUCTIONS:

AIco is your client. Your Submission for the Memo must include the following four items in the
following order (in one word file):

1. A maximum one-page business letter (complete with all business letter formalities):
   The business letter includes a letterhead with all contact information. The first paragraph of the letter, reminds your client about why you are writing. The second paragraph provides the client with bottom line results from your research, without any references. The third paragraph provides valuable planning advice. The fourth paragraph provides a polite close. The formal business letter is written in a less technical style than the following tax research memo.
2. The tax research memo (two or more pages), which uses the following subheadings (as expected in a tax research memo) and in the following order: Facts, Issues, Conclusions, List of Applicable Law, Discussion of Law, and Do not create any other subheadings. Review both the memo example and the grading rubric for the Memo. The memo itself requires at least two pages single-spaced for substantively addressing each of the three issues (with a blank line between paragraphs).

Your memo must identify two or more sophisticated tax issues for AIco,
at least one issue from each of the two paragraphs. Each issue must include the
relevant critical facts and precisely where in the code each issue arises. The memo must discuss and apply all relevant code section provisions (usually there is more than one provision from the same code section that is relevant) and the relevant regulations.

3. An appendix showing any relevant calculation for the amount of taxes or penalties
   your client must pay, with all numbers labelled for tax significance, such as “AGI” or
   “adjusted gross income.”
4. A full one-page self-assessment as to what was learned, what was difficult, etc.

The memo is due before the fourth class. Upload your file to the laulima assignment box
in just one file in word (no pdf file). The file should have your name starting the file name.

The revised memo is due before the seventh class. The revised memo continues with the same set of facts. It requires that you improve your memo (comments for improvements are provided by the prof. in the graded memo returned to your Laulima assignment box).

You must also enhance your memo with a minimum of the two most relevant court cases (maximum of five cases). For each paragraph in the problem, you must find at least one court case that extends the understanding of the law. Your discussion of each case requires a paragraph with a minimum of three sentences to discuss the relevant facts, the court’s holding, and the court’s reasoning. In the application, you must also apply each court case, comparing the client’s situation to the court case to determine whether a similar result should apply or is distinguishable.

The revised memo still needs to include the other three documents (cover letter, appendix, and self-assessment). Grading emphasis changes in the revised memo. For example, in the cover letter grading emphasis focuses on the quality of the planning advice. It does not require an entirely new self-assessment. One may simply modify part of the prior self-assessment, such as adding an additional paragraph.