TEXAS CHRISTIAN UNIVERSITY - M. J. NEELEY SCHOOL OF BUSINESS

ACCOUNTING 3303:  Introduction to Federal Taxation

Syllabus for Fall 1997

OBJECTIVES
1. Develop intuition about likely income tax consequences of business, investment, and personal transactions typical of most US federal income taxpayers. 2. Comprehend how tax laws influence decision making of businesses and individuals. 3. Perceive ethical and professional responsibilities in tax practitioner relations with clients and the government. 4. Develop skill in tax research using an electronic database. 5. Understand how individual taxpayers report information to IRS.

TEXTS TO PURCHASE - sold in Campus Bookstore Concepts of Federal Taxation, 1998 Edition by Kevin Murphy. Published by West. Other editions are not acceptable. ACCT 3303 Course Packet, Fall 1997 Edition.
RECOMMENDED FOR PURCHASE - BUT NOT REQUIRED Tax preparation software for Form 1040 (1996 tax year), such as TurboTax sold in the campus bookstore. Wall Street Journal - subscription form distributed in business school classes.
OTHER TEXTS - distributed in class IRS Instructions for 1040 IRS Pub. 17: Your Federal Income Taxes IRS Pub. 334: Tax Guide for Small Business 1997 federal tax law update

TIME COMMITMENT Important Notice: This course requires more effort outside of class than most courses - at least 9 to 16 hours every week. Although the work is challenging and time-consuming, you will gain useful knowledge for accounting, finance, management, law, and other fields.

PRE-REQUISITES Prior to beginning ACCT 3303 you must have completed the introductory financial accounting course, ACCT 2153, at TCU or an approved equivalent at another school. All business students, or students who wish to become business majors, must complete the lower division business sequence stated in the Undergraduate Bulletin before they may take 3000 or 4000 level business courses for application to the BBA degree. If you have questions about this policy, you should contact the Neeley Student Resource Center (130 Dan Rogers Hall, or 921-7529) immediately.

SPECIAL NEEDS If you require accommodation for a disability, please contact the Coordinator of Students with Disabilities at 921-7486, Rickel Building 106.

COURSE GRADING Exams: 3 @ 100 each 300 points 50% Research project: 1 @ 80 80 points 13% Tax returns: 2 @ 60 120 points 20% Problem sets for chapters 100 points 17% Total 600 points100%

TENTATIVE LETTER GRADE CUT-OFFS GradePoints A 540 or more B 480 - 539 C 420 - 479 D 360 - 419 F Under 360 The final point cut-offs will be determined after all final exams have been graded. Before the final exam, my only estimates of letter grades will be for students who have a high probability of getting a D or an F. Reports of students with unsatisfactory performance (D or F) will be submitted to the Registrar in early October. A student who wants to know his or her course grade before the final grade report from the Registrar's Office should use the Registrar's online grade reporting service. The address for the Registrar's home page is http://www.reg.tcu.edu/reg/reg_home.htm

SCORING PROTESTS ON ASSIGNMENTS Any protests on the scores for your exams, research projects, tax returns, or problem sets must be submitted in writing within one calendar week after the disputed item was distributed in class. The written protest must clearly identify why you think the disputed item should be scored differently. General requests for regrading or failure to follow directions will not be considered. You will not be granted an extension of time to file a grade protest if you were not present when the items were returned to the rest of the class. No points will be allowed for late assignments or late grade protests.

EXAMS (3 exams at 100 points each) Each exam will cover designated chapters from the textbook and notes. Some questions may be drawn from topics mentioned in class, assignments, textbook, guest speakers, or course packet. This year's ACCT 3303 course packet includes copies of exams from last year's ACCT 3303. The length and format for this year's exams will be announced in class. To each exam you may bring your textbook, notes, reference books, a calculator, pencils, ruler, and an eraser. Programmable calculators and computers are not allowed for exams. If you are committed to attend an event during an ACCT 3303 exam time, such as an athletic meet, musical performance, funeral, or court appearance; then you must arrange to take the exam before the scheduled exam date. Multiple exams on the same day and family vacations are not acceptable reasons for rescheduling an ACCT 3303 exam. If you miss an exam because you are confined to bed with a catastrophic illness or have a family emergency, then you must: (1) immediately notify the instructor by phone, email, or fax of the reason for your absence, and, (2) obtain an adequate written excuse from the TCU Student Health Center (921-7940) or the Dean of Campus Life office (921-7926, Sadler Hall 101). If these procedures are correctly followed, I may provide a makeup exam that is of comparable difficulty to the missed exam. If the procedures are not followed, a grade of zero will be given for the missed exam. You may request the alternate final exam time if you are a senior graduating this December. You have the option of requesting the alternate final exam time if you have more than 2 final exams scheduled in a 24-hour period. If you believe you qualify for an alternate final exam time, then you must submit to the instructor by December 2, a written note with your name, all fall courses, sections, and scheduled final exam times.

RESEARCH PROJECTS The purposes of research projects in ACCT 3303 are to give you experience in identifying tax-related issues, finding relevant tax authorities, and communicating the results. With this experience you will be better consumers of professional tax services. The ACCT 3303 assignments are not intended to teach basic writing skills. For assistance with writing and editing you should consult the William L. Adams Writing Center in 100 Rickel Building (921-7221; Monday-Friday 8:00-5:00 p.m.) and Center for Productive Communication in Tandy Hall 190 (921-7539; Monday-Friday 8:00-5:00 p.m. and possibly more hours), and off-campus services. These services may require appointments to serve you. You must work in groups on the tax research projects. The minimum size of a group is two, and the maximum size is four. Group members may be from any section. All students who work on the same project will receive the same grade. The names of all group members must appear in the upper-right-hand corner of the first page of the project submitted. You must use a word processor and spell-checker on every written assignment. The assignments should be printed on a high-quality ink-jet or laser printer. If you are unfamiliar with your software or hardware, you should allow at least two extra days to learn your system so that you can avoid last minute production crises. The on-campus computer labs are often very crowded on the days before research projects are due.

TAX RETURNS You must work in groups on the tax return projects. The minimum size of a group is two, and the maximum size is four. Group members may be from any section. All students who work on the same project will receive the same grade. The names of all group members must appear in the upper-right-hand corner of the first page of the project submitted. You do not need to maintain the same group members for all tax return projects. If you believe one group member is not making an adequate contribution to the group's efforts, then you do not need to work with him or her on a subsequent project. You may use tax preparation software, such as TurboTax, TaxCut, or other applications. However, you are responsible for learning how to enter information and understanding how information flows from one schedule to another. Alternatively, you may prepare the return manually. The exams might require you to prepare part of a tax return schedule. Some students find they learn more by preparing the entire tax return by hand without the use of tax preparation software. The required 1996 income tax forms and instructions may be included in your income tax preparation software, downloaded from the Web, photocopied from the textbook (Appendix C), or photocopied from the library Reference Desk's notebook of tax forms. The tax returns require a significant amount of time to analyze facts, apply tax law, read instructions, complete forms, and review. You should begin working on the tax returns at least one week, and preferably two weeks, before they are due. If you use computer software, allow adequate time for printing the tax returns - as much as 45 minutes on a slow printer.

PROBLEM SETS (100 points maximum) The attached daily assignment schedule has problem sets for 12 chapters. A maximum of 10 points are available on each problem set. The maximum number of points you can earn for problem sets is 100. Thus, you could earn the maximum 10 points on 10 problem sets for a total of 100. Although there will be no extra bonus points for turning in all 12 sets, you should do all assigned problems to prepare for the exams. Problem sets will be graded for completeness and returned to you. A solution to all parts of a problem must be attempted to receive full credit. All problems within a problem set will be allocated the same number of points unless otherwise noted in the assignment. For example, if a set has 5 problems, then each will be allocated 2 points unless otherwise noted. Similarly, if a set has 10 problems, each will be worth 1 point. All problem sets must be completed individually. You should use 8.5-by-11 inch paper. You may put solutions to several problems on one page. Solutions should be clearly identified by the problem number and page number from the text. Write your name and section meeting time at the top right corner of every page. Staple but do not fold the pages when you submit your problem sets. You may use computer spreadsheets or word processors for some problem sets. However, be aware that you will not be able to use computer software during an exam. Solutions to problem sets will be released by the Library Reserve Desk after 3:30 p. m. on the days that assignments are collected.

LATE ASSIGNMENTS All of the ACCT 3303 assignments other than exams will be collected at the beginning of class on the date listed in the ACCT 3303 daily schedule. I will also accept the assignments up to 3:30 p.m. on the due date in the mail slot outside my office door (Dan Rogers Hall 357). Alternatively, you can fax the assignments to the Neeley School fax machine (921-7227) by 3:30 p.m. Please do not send your assignments via e-mail. You may have a friend deliver an assignment for you provided they can meet the 3:30 deadline. No points will be granted for late assignments without a written excuse from the TCU Health Center (921-7940) or the Dean of Campus Life (921-7926, Sadler Hall 101). Acceptable excuses are illness that confine you to bed or an out-of-town funeral. To receive credit for a late assignment you must submit the assignment on the day you are available to return to any class. For example, if an assignment is due on Thursday; you are confined to bed with an illness on Thursday; and, you are allowed to get out of bed on Friday; then the assignment is due on Friday. The written verification must be received by the instructor within 5 calendar days after the end of your illness. Consult the TCU Student Handbook for further information on the university Class Attendance Policy. If you have a scheduled event such as athletics, music event, or court appearance; then you must submit the assignment prior to the assigned day or have a classmate deliver the assignment for you before 3:30 p. m. on the due date.

WORLDWIDE WEB ACCESS You will need access to the Worldwide Web for ACCT 3303 and other business school courses. The computer labs in Tandy, Bass, and Sid Richardson Halls and the Mary Couts Burnett Library provide free Worldwide Web access for registered students. However, these labs may not be adequate for the demand at peak times during the semester. You may want to investigate obtaining Internet and Worldwide Web access from a connection in your dorm or a commercial Internet service provider.

EMAIL Email is a convenient means of communicating with instructors and students. You may use either the free email account available to students from TCU Information Services (921-7682; Sid Richardson Hall 148), or a commercial Internet service provider.

PLAGIARISM Copying a current or former student's assignment by any means will not be tolerated.

CURRENT EVENTS Current events in tax policy and practice will be discussed in class. Some of the events and issues mentioned in class will appear in exam questions even if they are not mentioned in the textbook. An excellent source for current tax events is The Wall Street Journal with its weekly "Tax Report" column that appears on the front page Wednesdays, personal investing articles that usually appear in section C, and other tax-related articles scattered throughout the paper.

GUEST SPEAKERS During the semester several guest speakers have volunteered their time to speak to ACCT 3303. Be prepared to ask these speakers good thought-provoking questions. Material presented by the guest speakers will be included on the course exams. After class you may meet the speakers and ask about employment opportunities.

TAX COURT Observing a session of Tax Court is a valuable educational experience. I recommend you attend if you have an interest in taxation or law. The United States Tax Court meets several times a year in Dallas and other cities across the United States. Tax Court meets in room 591 (5th floor) of the Terminal Annex Federal Building, 207 South Houston, between Dealey Plaza and Union Station in downtown Dallas. The Tax Court judge's chamber in Dallas has a phone, (214) 655-5975, but it is rarely answered. The calendar clerk for all locations of the Tax Court is in Washington, DC, at (202) 606-8754. Generally, a Tax Court judge comes to a city outside Washington, DC, for a session that could last up to five days. The first morning of each weekly session is a calendar call where the judge asks the IRS and the taxpayer's representative if they are ready for trial or if they are still negotiating a pretrial settlement. If the parties are ready for trial, the judge will decide the time of the trial during the calendar call. Usually, the judge has trials on only two, three, or four days during a session, and then returns to Washington. The IRS District Counsel office in Dallas, (214) 308-7900, will know the weekly trial schedule on the afternoon of the calendar call.

CLASS ATTENDANCE Class attendance is required. Class attendance is vital on days when exams or guest speakers are scheduled. See the Class Attendance Policy in the TCU Student Handbook.

CLASS MATERIALS You should bring your ACCT 3303 packet and calculator to all class meetings. You should bring your textbook to class meetings where the daily schedule indicates a chapter will be discussed. Other items to bring to class are indicated in the daily schedule.

PARTICIPATION IN CLASS DISCUSSION Participation in class discussion is encouraged. If students do not read assigned material or do not participate in class discussion, the course grading scheme may be modified to penalize unprepared and non-participating students.

DAILY ASSIGNMENTS You are responsible for completing the following reading and problems before the class meeting. Adjustments to this schedule might be announced in class.

ACCT 3303 Daily Schedule - Fall 1997 Adjustments to this schedule will be announced in class. Tuesday, August 26

Topics	Overview of course and assignments Importance of the study of taxes
Preparation	Purchase course packet and textbook
Submit	Student data sheet (distributed in class) Wall Street Journal subscription (optional)
In-class	Discussion of syllabus and schedule Definition of taxes "Why study taxation?"

Thursday, August 28

Topics

Tax terminology
Distinguish federal income taxes from other taxes, such as payroll, estate, gift, sales, use, value-added, and property taxes
IRS audit and appeal process
Individual income tax calculation
Tax planning
Ethical considerations in tax practice

Preparation

Text chapter 1, pages 1-40

Submit

In-class

Discuss chapter 1

Friday, August 29 - Last day for changing or adding courses
Monday, September 1, Labor Day holiday


Tuesday, September 2

Topics

General concepts of US income tax liability rules
Accounting concepts for taxable income

Preparation

Text chapter 2, pages 50-63

Submit

Chapter 1 problems 41, 43, 45, 64, 65

In-class

Solutions to chapter 1 problems available from Library Reserve Desk after 3:30 p. m.


Thursday, September 4

Topics

Income concepts
Deduction concepts

Preparation

Text chapter 2, pages 63-75

Submit

In-class

Tuesday, September 9

Topics

General, accounting, income and deduction concepts

Preparation

Text chapter 2, pages 50-75

Submit

Chapter 2 problems 20, 24, 30, 32, 35, 37, 43, 48, 54, 67
(Comment: Write names of tax concepts from chapter 2 that may be relevant even if you are not confident of the correct answer.)

In-class

Applications of tax concepts in chapter 2
Distribute IRS publications

Solutions to chapter 2 problems available from Library Reserve Desk after 3:30 p. m.
Note that on September 16, class will meet in the Library Training Room of the Mary Couts Burnett Library.


Thursday, September 11  (TCU Fall Convocation scheduled for 11:00 am.  All classes will be dismissed from 10:45 to 12:30 so that students and faculty may attend.)

Topics

Structure of tax law and tax authorities

Preparation

Text chapter 15, pages 741-760

Submit

In-class

Discuss chapter 15

Note that on September 16, class will meet in the Library Training Room of the Mary Couts Burnett Library.


Tuesday, September 16
MEET IN LIBRARY TRAINING ROOM, in the Mary Couts Burnett Library. From the library's main lobby proceed up the stairs or elevator and turn left (west). Proceed past many bookshelves and the library training room is to the left side of the bookshelves.

Topics

Tax research on CD-ROM and Web
Strategies for searching tax authorities

Preparation

Text chapter 15, pages 760-767
Packet: Tax Research Guide, all pages

Submit

In-class

Demonstration of tax research on CD-ROM
Guest: Alexia Strout-Dapaz, business reference librarian from Mary Couts Burnett Library

Thursday, September 18

Topics

What constitutes income?
Common income sources

Preparation

Text chapter 3, pages 91-116

Submit

In-class

Discuss chapter 3

Tuesday, September 23

Topics

Introduction to capital gains and losses
1997 update on capital gains and losses

Preparation

Text chapter 3, pages 116-121
1997 tax law update

Submit

Chapter 15 problems 37, 38, 39, 40, 45, 46, 47, 48, 49, 50
Note: Read the ACCT 3303 Tax Research Guide thoroughly before beginning this assignment. Use the CCH CD-ROM for the odd-numbered problems, and a Web browser for the even-numbered problems

In-class

Discuss chapter 3

Solutions to chapter 15 problems available from Library Reserve Desk after 3:30 p. m.

Thursday, September 25

Topics

Effect of accounting method choice on taxable income
Review for Exam 1

Preparation

Text chapter 3, pages 91-126

Submit

Chapter 3 problems 35, 37, 47, 64, 77

In-class

Discuss chapter 3

Solutions to chapter 3 problems available from Library Reserve Desk after 3:30 p. m.  Similarly, all other chapter problem set solutions will be available at the Library Reserve Desk after 3:30 p. m. on the due date.

Tuesday, September 30

Topics

Preparation

Text chapters 1-3, 15, any materials discussed in class, 1997 tax law update

Submit

Bring calculator, textbook, and reference materials

In-class

EXAM 1 (chapters 1,2,3, and 15)

Thursday, October 2

Topics

Gross income exclusions
Employment-related exclusions 

Preparation

Text chapter 4, pages 143-158

Submit

In-class

Discuss chapter 4

Friday, October 3: Last day to withdraw from fall courses

Tuesday, October 7

Topics

Returns of human capital
Investment-related exclusions

Preparation

Text chapter 4, pages 158-168

Submit

Tax Return Phase I:  Textbook Appendix B, pages B-2 to B-4 and Exhibits later in Appendix B. See additional instructions at page 4 of the ACCT 3303 syllabus.

In-class

Return Exam 1

Thursday, October 9

Topics

Introduction to Business Expenses 
Classification of deductions
Tests for deductibility
Mixed-Use assets and expenditures:
   hobby, vacation home, home office

Preparation

Text chapter 5, pages 183-214

Submit

Chapter 4 problems 21, 25, 28, 29, 38, 48, 55, 62, 65, 67 

In-class

Discuss chapter 5

Friday, October 10 - Fall Mid-semester Break

Tuesday, October 14

Topics

Timing of deductions (chapter 5)
Other business expenses (chapter 6)
Compensation of employees
Bad debts, insurance, taxes, legal fees
Deductions for AGI: retirement, alimony paid, etc.

Preparation

Text chapter 5, pages 215-224
Text chapter 6, pages 256-272
1997 tax law update

Submit

Chapter 5 problems 33, 35, 48, 50, 56, 63, 66, 73, 78, 82

In-class

Discuss Tax Research Project due on November 4
Discuss chapters 5 and 6

Thursday, October 16

Topics

Business travel and entertainment (T&E)
Business gifts, reporting T&E

Preparation

Text chapter 6, pages 244-256

Submit

Chapter 6 problems 25, 28, 30, 32, 36, 39, 41, 42, 46, 49

In-class

Guest: Dan Cooper, Tax Manager, Ernst & Young LLP
Discuss travel, entertainment, and business gifts

Tuesday, October 21

Topics

Net Operating Losses (NOL)
Tax Shelter Losses
Passive Activity Losses (PAL)

Preparation

Text chapter 7, pages 287-307

Submit

In-class

Discuss chapter 7

Thursday, October 23

Topics

Transaction losses: business casualty and theft losses, capital losses, special investment losses, personal use losses

Preparation

Text chapter 7, pages 307-319
1997 tax law update 

Submit

Chapter 7 problems 22, 23, 24, 29, 30, 41, 43, 52, 59, 62

In-class

Discuss chapter 7

Tuesday, October 28

Topics

Preparation

Text chapters 4-7, any material discussed in class after Exam 1, 1997 tax law update

Submit

Bring calculator, textbook, and reference materials

In-class

Exam 2 covers chapters 4-7 

Thursday, October 30

Topics

Personal and dependency exemptions
Filing status
Review deductions for AGI
Standard deduction

Preparation

Text chapter 8, pages 332-341

Submit

In-class

Discuss chapter 8

Tuesday, November 4

Topics

Itemized deductions from adjusted gross income (AGI)
Medical, taxes, interest, charitable

Preparation

Text chapter 8, pages 341-349

Submit

Tax Research Project.  You must work in groups with a minimum of two students and a maximum of four. Select one of the tax research cases from chapter 15, cases numbered 54 through 69, pages 770-775.  Prepare a client letter, file research memo, and client bill using the format specified in the Tax Research Guide in the ACCT 3303 course packet.  Be particularly careful to follow the packet's citation format for primary authorities.  Do not include any secondary authority references.  The upper right-hand corner of the first page must list all the students in your group and the number of the case you selected from the textbook.  See additional instructions at page 3 of the ACCT 3303 syllabus.

In-class

Return Exam 2; discuss chapter 8

Thursday, November 6

Topics

Miscellaneous itemized deductions
Reduced deductions for high-income taxpayers
Unearned income of a minor child ("kiddie tax")

Preparation

Text chapter 8, pages 349-355

Submit

In-class

Discuss chapter 8

Tuesday, November 11

Topics

Tax credits for individuals
Filing requirements
IRS examination, audit, and appeal (chapter 1)
Individual income tax calculation (chapter 1)

Preparation

Text chapter 8, pages 355-362
1997 tax law update for family tax credits
Text chapter 1, pages 25-31

Submit

Chapter 8 problems 36, 38, 41, 43, 46, 55, 57, 58, 63, 74.       Note: Some of the solutions will be modified by the 1997 tax law changes. Be prepared to solve these problems using the law both before and after the 1997 amendments. 

In-class

Discuss chapter 8

Thursday, November 13

Topics

Adjusted basis
Basis in conduit entities
Basis in purchased assets

Preparation

Text chapter 9, pages 387-405

Submit

In-class

Discuss chapter 9

Tuesday, November 18

Topics

Basis in property acquired by gift and inheritance
Property converted from personal to business use
Basis in securities

Preparation

Text chapter 9, pages 405-420

Submit

Tax Return Phase II:  Textbook Appendix B, pages B-4 to B-7 and Exhibits later in Appendix B. You will also need the information and data from phase I at pages B-2 to B-4. See additional instructions at page 4 of the ACCT 3303 syllabus.

In-class

Discuss chapter 9

Chapters 10, 11, and 12 will be omitted this semester.

Thursday, November 20

Topics

Choice of business entity - introduction
Nontax factors
General income tax factors
Formation

Preparation

Text chapter 13, pages 587-619

Submit

Chapter 9 problems 21, 23, 37, 46, 49, 51, 52, 59, 62, 67

In-class

Discuss chapter 13

Tuesday, November 25

Topics

Operation of business entities
Comparison of entities

Preparation

Text chapter 13, pages 619-644

Submit

Chapter 13 problems 55, 63, 66, 67, 72, 74, 88, 93, 109, 112

In-class

Discuss chapter 13

Thursday, November 27 - Thanksgiving Day

Tuesday, December 2

Topics

Compensation plans

Preparation

Text chapter 14, pages 660-687

Submit

In-class

Guest: Jeff Reeter, General Agent, Northwestern Mutual Life, discuss deferred compensation plans

Thursday, December 4

Topics

Other tax liability considerations
Tax planning

Preparation

Text chapter 14, pages 687-725

Submit

Chapter 14 problems 51, 53, 55, 58, 61, 67, 74, 77, 81, 94 

In-class

Guest: Chuck Lieser, Tax Partner, Weaver and Tidwell LLP, discuss tax planning

Requests for alternative final exam times must be submitted in writing to the instructor by Thursday, December 4.

Tuesday, December 9

Topics

Ethics in tax practice
Professional malpractice

Preparation

Text chapter 1, pages 36-40
Text Appendix D: Statements on Responsibility 
   in Tax Practice
ACCT 3303 Packet: "Tax Ethics and Malpractice"

Submit

In-class

Video: "Loss Prevention for Accounting Firms"
Ethics and malpractice cases

Wednesday, December 10 - Last day of fall semester classes

Final exam coverage:  Most of the problems on the final exam will be from the material covered after the second exam including ethics and malpractice, 1997 tax law updates, and the guest speakers. A few problems will include material from chapters covered earlier, class discussions, guest speakers, course packet, and supplemental readings.

Friday, December 12, 2:00-4:30 p.m. in DRH 272, Alternative Final Exam for ACCT 3303.  Only graduating seniors and other students with the instructor's permission may take the alternative final exam.  All requests for alternative final exam times must be submitted in writing.

Tuesday, December 16, 11:30-2:00 p.m. in DRH 272, Final Exam ACCT 3303-35 (usually meets at 11:00)

Thursday, December 18, 8:00-10:30 am in DRH 272, Final Exam ACCT 3303-15 (usually meets at 9:30)

Thursday, December 18, 3:00-5:30 p.m. in DRH 272, Final Exam ACCT 3303-55 (usually meets at 2:00)