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MEMORANDUM TO: earth-closet metalworker, Esq FROM: XXXXX Date: August 5, 2012 SUBJECT: Recommendations for stern and Jane smith assess concerns After reviewing the make outs that were of concern in regards to John and Jane smith taxes, I would like to address them and offer recommendations that allow be beneficial in reducing their tax liabilities. The issues that atomic number 18 turn to are listed below: 1. John Smiths tax Issues: 1(a). How is the $300,000 treated for purposes of federal tax income? The $300,000 real by Mr. Smith was fees and is treated as sodding(a) income; therefor it is taxable and is subjected to federal official income tax. IRC Code Section 61 (a) defines gross income as income from whatsoever(prenominal) stem derived, including (but non limited to) remuneration for services, including fees, commissions, outer boundary benefits, and similar items. I.R.C. § 61(a)(1). Courts consistently train upheld the de termination that wages top at heart divide 61(a)(1)s definition of compensation and, accordingly, constitute assessable income. Mr. Smith would have to pay these taxes in a apropos manner. The law states that if the amount was not nonrecreational for on bandaging taxes, he would also be go about with a latterly payment penalty.

The Sixteenth Amendment to the Constitution, ratified in 1913, provides that Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. In United States v. Connor, 898 F.2d. at 943, the tercet Circuit noted that every court which has ever considered the issue h! as unequivocally rejected the argument that wages are not income. All income received by a taxpayer is income under section 61 unless it is specifically exempted or excluded. http://www.irs.gov/pub/irs-drop/rr-07-19.pdf 1(b). How is the $25,000 treated for purposes of Federal tax income? The $25,000 that was paid up front for expenses originally were not taxable and should...If you want to get a full essay, tell it on our website: OrderEssay.net

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