Discussion 1 and 2
Discussion 1
Imagine a situation in which a client under audit by the IRS omitted $100,000 in income. From the e-Activity, examine the major factors relative to the omission by the client that would result in a criminal investigation, rather than a civil fraud proposal by the IRS.
Evidence of Fraud
Based on the scenario in the first part of this discussion, suggest at least one strategy that the client should use in defense of a criminal case pursued. Provide a rationale for your response.
Discussion 2
Per the text, a U.S. parent company does not include the income of a foreign subsidiary until the income is repatriated as dividends. Defend the creation of foreign subsidiaries as a mechanism to defer income of major U.S. companies. Propose a new tax law that will benefit the U.S. Treasury from the deferral of income from foreign subsidiaries and encourage the repatriation of the previously deferred income.
Examine the current provisions of the IRC designed to prevent tax avoidance between a U.S. corporation and a foreign subsidiary, and evaluate the importance of using advance pricing agreements (APAs) to execute such provisions. Defend or critique the confidentiality treatment of APAs under the Freedom of Information Act (FOIA). Justify your position.