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a.Social considerations, so the taxpayer is able to maintain and seek employment.b.Social considerations, because this loan is for qualified residents.c.Equality considerations, because when a married couple files for a joint return there is a lower tax rate.d.Social considerations, because gambling losses can be deducted up to the amount of the gambling gain. If there is excess, then it cannot be claimed.e.Social considerations, because businesses are able to use current loses to offset the last two years of profits. f.Wherewithal to pay concept, because the taxpayer is able to defer recognitionof the profit of the sale until he/she actually receives payment. g.Political considerations, because special interest legislation is not necessary to be commended. h.Wherewithal to pay concept, because it is justified under the special interest legislation. Chapter 2: 7, 13, 20, 247. Eddy Falls is considering litigating a tax deficiency of approximately $229,030 in the court system. He asks you to provide him with a short description of his litigation alternatives, indicating the advantages and disadvantages of each. Prepare your response to Eddy in the form of a letter. His address is 200 Mesa Drive, Tucson, AZ 85714.January 29, 2017200 Mesa DriveTucson, AZ 857143
Lisa FowlerModule 1: Textbook ProblemsDear Eddy,I am writing you this letter, because you requested that I provide you with a short description of your litigation alternatives, indicating the advantages and disadvantages of each. That being said there are two choices. These choices include Tax court and Us District Court/ the Federal Court of Claims.1. Tax courtAdvantages and disadvantages:The judges are all tax lawyers.The process is less formal than in other federal courts, but equity is not considered.You do not have to pay taxes before attending court.2. US District Court/ Federal Court of Claims Advantages and disadvantages:The litigation costs will be higherJudges are not tax expertsYou will have to pay tax and file a claim, which will be rejected. Once the claim is rejected you then have to go through the process of suing in US District Court/Federal Court of Claims for the refund.I hope this information helps. If you have any further questions, please feel free to contact me.Best Regards,Lisa Fowler