CONCEPTS IN FED.TAX.,2020-W/ACCESS
CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN: 9780357110362
Author: Murphy
Publisher: CENGAGE L
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Joe Rezzo, a college student majoring in accounting, helped finance his education with a part-time job maintaining all accounting records for a small business, White Company, located near the campus. Upon graduation, Rezzo passed the CPA examination and joined the audit staff of a national CPA firm. However, he continued to perform all accounting work for White Company during his “leisure time.” Two years later, Rezzo received his CPA license and decided to give up his part-time work with White Company. He notified White that he would no longer be available after preparing the year-end financial statements. On January 7, Rezzo delivered the annual financial statements as his final act for White Company. The owner then made the following request: “Joe, I am applying for a substantial bank loan, and the bank loan officer insists upon getting audited financial statements to support my loan application. You are now a CPA, and you know everything that’s happened in this company and…
You are a Tax Director in the following situations:a) A client of the firm has enquired about how to treat the income of Oliver Martin and Erica Ferguson who both provide services to AGL Limited. The client indicates that she is unsure of the type of employment and how to account for the income tax for each person. The client provided Tamika with the following information: Oliver Martin Oliver Martin provides accounting services for the company. He uses his own computer. He works from the company’s premises Monday to Wednesday only. He is paid at the end of each month. To obtain his payment he must provide the company with an invoice detailing the days worked. He is paid a daily rate of $30,000 for 8 hours of work. He determines his own time of work. Tasks are assigned to Oliver by the Head of Reporting & Finance. He reports directly to the Head of Reporting & Finance. Oliver is not entitled to vacation leave, sick leave, and he does not a participate in the company’s pension…
In order to improve the cash flow of the company, Neal Emerald decided to postpone depositing all employment taxes a few months ago. He told his sales manager, “I’ll pay up before the IRS catches up with me.” What risks does Emerald face by not upholding his responsibility for the collection and payment of employment taxes?
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