A taxpayer works for a law firm. You are working on her tax return. She tells you that she does not have any receipts for her daily parking because the firm pays the parking lot directly for an annual spot for her. She tells you not to worry about it because she knows that employees do not have to pay tax on the value of parking privileges.
a. What is your role in this situation?
b. How does your role affect the four steps in the research process?
c. What are the questions you need to ask the taxpayer?
d. What is your initial research question?
e. After you speak with her, you discover that the Internal Revenue Code does not consider a partner in a firm to be an employee.
i. How does this new information affect your research?
ii. Are there some additional questions that you now need to ask? What is the danger here of failing to gather all the relevant facts?
iii. Does this information change or add to your initial research question?
iv. You explain to her that, given the facts, she will need to report the value of the parking as income. She tells you just to forget she told you about the parking. Without getting into detail, what issues does this raise?