ou work for a CPA firm. Part of your responsibility with

This will be a team assignment. Students will collaborate with three to four classmates to provide the best tax strategy for the client by analyzing the client's situation, and providing guidance and recommendations with IRC (Internal Revenue Code) support. Consequently, this case study will require research into the tax issues discussed above, and collaboration with the team as to the best approaches to legally minimize tax liability currently and for the future.

The teams will meet to discuss the client's situation, the documentation needed from the client, and how to proceed given the tax issues. Webex will provide experiential learning in real world virtual meeting technologies, as well as documentation/recording of the team meetings which took place. At the end of the week, a Kaltura Media Gallery presentation (using PowerPoint) will be required to discuss the issues and the final client recommendations. Each team member will participate in the presentation. A peer review will also be required. Note that this case study does not require the use of any tax software because the case study involves researching tax issues and providing client recommendations based on analyzing the IRC. Access to the IRC will be necessary

Scenario

You work for a CPA firm. Part of your responsibility with the firm is the preparation of individual income tax returns. A new client enters your office and indicates to you that in 20X1, he or she inherited $300,000 from his or her father's estate. The client wants to invest the money in a way that will result in the least amount of gross income in the current and future years. In addition, the client received $75,000 from the settlement of a sexual discrimination case. The client indicates that the settlement was for damages as a result of sexual harassment, and that it did not include back pay or vacation pay. You have a small tax accounting preparation and bookkeeping practice. The client in your initial meeting did not provide you any documentation regarding the inheritance or the settlement.

• Your role in this scenario is to decide on what you will do, what you can do, and how to proceed.
• What would you advise the client with respect to the inheritance received?
• What would you advise the client to do if asked how to invest the future inheritance proceeds?
• Is the client trying to evade the payment of taxes?
• What would you advise the client as to the treatment of the settlement? Please provide support for your answer.