Ind. IO Chap. 1 - 2008

Ind. IO Chap. 1 - 2008 - Chapter I:1 An Introduction to...

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Chapter I:1 An Introduction to Taxation Learning Objectives After studying this chapter, the student should be able to: 1. Discuss the history of taxation in the United States. 2. Differentiate between the three types of tax rate structures. 3. Describe the various types of taxes. 4. Discuss what constitutes a "good" tax structure, the objectives of the federal income tax law, and recent tax reform proposals. 5. Describe the tax entities in the federal income tax system. 6. Identify the various tax law sources and understand their implications for tax practice. 7. Describe the legislative process for the enactment of the tax law. 8. Describe the administrative procedures under the tax law. 9. Describe the components of a tax practice and understand the importance of computer applications in taxation. Areas of Greater Significance For an introductory course in taxation, two of the topics in this chapter should be emphasized. The first topic to be emphasized is the sources of tax law (both primary and secondary). The student should understand that in spite of the black and white rule approach in much of the following material, a tax practitioner may spend a considerable amount of time dealing with issues that are not clear cut. Second, the administration of the tax law should be emphasized. An understanding of how the Internal Revenue Service operates is valuable to each student, even if the only future application is with regard to the student's own individual tax return. Areas of Lesser Significance I:IO1-1
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In the interest of time, the instructor may determine that the following areas are best covered by student reading, rather than class discussion: 1. History of taxation in the United States. 2. Other types of taxes. 3. Criteria for a tax structure. 4. Objectives of the federal income tax law. Problem Areas for Students The following areas may prove especially difficult for students: 1. The relative weight to be given to various governmental interpretations of the tax law (i.e., Treasury Regulation vs. Tax Court case). 2. The mechanics and thought process in doing tax research. An instructor who will be using tax research as a significant pedagogical tool may want to spend significant time on the topic at this point. It is very difficult for a student to understand tax research without doing tax research. (See Chapter I:15). Highlights of Recent Tax Law Changes The following items of tax law have changed since the 2007 edition of this chapter: 1. The levels at which higher marginal individual tax rates become effective have increased due to indexing for inflation. 2. Both the amount per exemption and the thresholds for phase-out of exemptions have increased due to indexing for inflation.
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Ind. IO Chap. 1 - 2008 - Chapter I:1 An Introduction to...

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