Description 4) The Pre-Audit Phone Call (due March 3 before class) Assume that you will be using a classic investigative technique – the Surprise Phone Call. You call the taxpayer at his home or his work. You identify yourself, gently state that his 2014 return has been selected for review, and that you are calling to set up an appointment in the next few weeks to meet with him at his residence for a few hours. After he recovers from the initial shock of the news, you ask him if he has few minutes to go over some preliminary matters before you come out so as to help narrow your audit to no more than what is absolutely necessary. Assume he agrees to answer your questions. List fifteen (15) questions you would like to ask in order of importance to pin the facts down before the taxpayer gets a chance to speak to a representative. Remember, once he hires a representative, your questions will primarily be answered by the representative. 2 attachmentsSlide 1 of 2attachment_1attachment_1attachment_2attachment_2.slider-slide > img { width: 100%; display: block; } .slider-slide > img:focus { margin: auto; } Unformatted Attachment Preview ACCT 542 Homework Project Spring Semester 2021 Accompanying these instructions is a mock 2014 tax return of Joe D. Plummer. This homework project has 4 due dates beginning next week and each week thereafter. I have highlighted the due dates below. Instructions Pretend you are an IRS Revenue Agent and have been assigned Mr. Plummer’s tax return for examination (audit). The return contains various entries which you will need to carefully examine. This is not a group project. You should email me your responses to the questions before each class begins on the dates specified below. The return was filed on 4/15/2015 and contains the following forms and schedules: Form 1040 & Schedules A, B, C & SE. It was prepared by the taxpayer himself on Turbo Tax. Assume it was filed with the IRS as you see it, even though it contains some missing information. Assume it was signed by the taxpayer, and had a W-2 attached to it issued by ABC Construction Corp., 555 South Victoria Ave., Ventura, CA and that the W-2 was for $1,500,000. Review Form 1040 and each schedule carefully. See if any of the information from one schedule might relate to another schedule – in other words, given what you see in one schedule, does that information correspond or conflict with information on another schedule. What makes this exam different from most of your past exams at CSUN is that there is no right and wrong answer. This project requires that you make certain inferences from the information you are provided and then make some factual assumptions or suppositions about the taxpayer, his lifestyle, his assets, his business dealings, his sources of income, his expenses, the nature of his business, the nature of his income, etc. This project requires you to use your common sense and everyday experiences, as well as your basic business, accounting and tax knowledge. What I am looking for most is your analysis, followed by the organization of your answers. 1) Prepare a written Pre-Audit Analysis as follows (due Feb 10 before class) : a. Identify and prepare a list of all the items on the tax return that appear to be strange, unusual, questionable, excessively large or excessively small in relation to other information on the return, etc. To do this, provide a one or two sentence explanation for each such item. That is, tell me why you identified the item & what the item tells you about the taxpayer (meaning, about his assets, about his income, about his standard of living/life style, etc.) Also, tell me if you are drawing any inferences from the dollar value of the item, how it is labeled/described on the tax return, how it is being reported or deducted. 2) Prepare an Audit Plan (due Feb 17 before class) a. Prepare a list of twelve (12) deductions shown on the return that you want to audit. For each of these deductions that you list, provide a one or two sentences for each explaining why you have identified the deduction. In other words, explain why you feel there is a possibility the deduction may be improper/non-deductible, excessive/not reasonable, etc. b. Prepare a list of five (5) income items shown on the return that you plan ask about during your interview of the taxpayer or his representative. For each item, explain in one or two sentences why you selected these items and what inferences you are drawing from the amount of income, from the manner in which it is reported, from the label that is placed on it, from the category of income it falls under, etc. 3) Document Request and Background Research (due Feb 24 before class) c. For each of the 12 deduction items and 5 income items that you have selected for audit, list in a few sentences list: i. What documents you are requesting that the taxpayer provide to you during the audit appointment(s) for each of the items you identified that you are examining/auditing. ii. What public records you will review before your interview to be armed with information so that you know whether the taxpayer or his representative is being truthful. iii. What internal IRS reports/transcripts can you review in order to determine if the taxpayer reported all of his income and to determine the source of his income in case the source is not clear on the return. iv. With respect to the 12 deductions, make one or two assumptions of what the taxpayer might tell you or the documents he might provide that would make the deduction entirely non-deductible (other than lack of proof of payment) or partially non-deductible. Tell me what your assumption(s) is/are and how that would influence the outcome of whether that particular expense is deductible. v. With respect to the 5 income items, make one or two assumptions about what the taxpayer might tell you about the source or nature of the income. In other words, give me one or two examples of what the taxpayer might say that may lead you to believe that: 1. there may be other unreported income 2. there may be related persons or entities whose information may shed more light on this taxpayer and/or his income from other sources. If so, a. what information or documents will you ask for relating to such related persons or entities. b. are there any related party documents you wish to review, if so please explain in one or two sentences what these documents might be and what they might reflect about the taxpayer, his business dealings, etc. 4) The Pre-Audit Phone Call (due March 3 before class) Assume that you will be using a classic investigative technique – the Surprise Phone Call. You call the taxpayer at his home or his work. You identify yourself, gently state that his 2014 return has been selected for review, and that you are calling to set up an appointment in the next few weeks to meet with him at his residence for a few hours. After he recovers from the initial shock of the news, you ask him if he has few minutes to go over some preliminary matters before you come out so as to help narrow your audit to no more than what is absolutely necessary. Assume he agrees to answer your questions. List fifteen (15) questions you would like to ask in order of importance to pin the facts down before the taxpayer gets a chance to speak to a representative. Remember, once he hires a representative, your questions will primarily be answered by the representative. Good luck and keep in mind the following general directives of the IRS: The mission of the IRS is to “Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.” This mission statement describes the IRS’ role and the public’s expectation about how the IRS should perform that role. • • • In the United States, the Congress passes tax laws and requires taxpayers to comply. The taxpayer’s role is to understand and meet his or her tax obligations. The IRS’ role is to help the large majority of compliant taxpayers with the tax law, while ensuring that the minority who are unwilling to comply pay their fair share. How this plays out in the tax audit world is as follows: 1. It is the Revenue Agent’s duty to help achieve the taxpayer’s compliance with the tax laws. 2. The Revenue Agent must be courteous but firm with taxpayers 3. When a tax issue can go either way, the Revenue Agent must protect the interests of the government. 4. Unless otherwise told to do so, a Revenue Agent must not spend too much time on matters that will not yield tax dollars for the government. 5. The Revenue Agent must try to close the case in 6 months or less when possible, and if that is not possible, he/she must articulate to management why additional time is needed. And these more specific guidelines from the Internal Revenue Manual [next page] Section 4.10.2.3 (08-01-2007) — In-depth Pre-contact Analysis 1. The examiner is responsible for determining the scope of the audit, beginning with the issues identified by the classifier on the classification check sheet. The examiner must perform a pre-contact analysis including a thorough review of the case file to identify large, unusual, or questionable items (LUQs) beyond those selected on the classification check sheet. The examiner should take the following actions: A. Review the complete tax return including line items, credits, the balance sheet, elections and schedules, and any other items attached to the return. B. [omitted] C. Review internal and external data from the following sources: IRP Transcripts, Asset locator / people locator, and Internet Research. D. [omitted] ————————————–Section 4.10.2.3.1 (08-01-2007) – Large Unusual Questionable Items (LUQs) Defined 1. The definition of a large, unusual, or questionable item will depend on the examiner’s perception of the return as a whole and the separate items that comprise the return. Some factors to be considered when identifying LUQs are: A. Comparative size of the item — an expense item of $6,000.00 with total expenses of $30,000.00 would be a large item; however, if total expenses are $300,000.00, the item would not be generally considered a large item. B. Absolute size of the item — despite the comparability factor, size by itself may be significant. For example, a $50,000 item may be significant even though it represents a small percentage of taxable income. C. Inherent character of the item — although the amount of an item may be insignificant, the nature of the item may be significant, e.g., airplane expenses claimed on a plumber’s Schedule C. D. Evidence of intent to mislead — this may include missing schedules, incomplete schedules, misclassified entries, or obviously incorrect items on the return. E. Beneficial effect of the manner in which an item is reported — expenses claimed on a business schedule rather than claimed as an itemized deduction. F. Relationship to other items — incomplete transactions identified on the tax return. For example, the taxpayer reported sales of stock but no dividend income. G. Whipsaw issues — occur when there is a transaction between two parties and characteristics of the transaction will benefit one party and harm the other. Examples include alimony vs. child support, sale vs. rental/royalty, employee vs. independent contractor, gift vs. income. H. [omitted] I. Missing items — consideration should be given to items which are not shown on the return but would normally appear on the returns of similar taxpayers. This applies not only to the examination of income, but also to expenses, deductions, etc., that would result in tax changes favorable to the taxpayer. Form 1040 Department of the Treasury ‘ Internal Revenue Service (99) U.S. Individual Income Tax Return For the year Jan 1 – Dec 31, 2014, or other tax year beginning 2014 , 2014, ending Your first name and initial OMB No. 1545-0074 IRS Use Only , 20 ‘ Do not write or staple in this space. See separate instructions. Last name Your social security number JOSEPH D PLUMMER 133-50-5453 If a joint return, spouse’s first name and initial Last name Spouse’s social security number Home address (number and street). If you have a P.O. box, see instructions. Apartment no. 3501 CARIBEH DRIVE City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). ENCINO, CA 91436 Foreign country name Foreign province/state/county Foreign postal code J Make sure the SSN(s) above and on line 6c are correct. Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. You Filing Status Check only one box. Exemptions 1 2 3 Single 4 Married filing jointly (even if only one had income) Married filing separately. Enter spouse’s SSN above & full name here. . G 5 Spouse X Head of household (with qualifying person). (See instructions.) If the qualifying person is a child but not your dependent, enter this child’s name here. .. G Qualifying widow(er) with dependent child 6a X Yourself. If someone can claim you as a dependent, do not check box 6a. . . . . . . . . . . Boxes checked on 6a and 6b. . . No. of children on 6c who: b Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) b if (2) Dependent’s (3) Dependent’s c Dependents: child under ? lived social security relationship age 17 with you. . . . . . number to you qualifying for child tax cr ? did not Last name (1) First name (see instrs) live with you If more than four dependents, see instructions and check here. . . G JOSEPH PLUMMER II JOSEPHINE PLUMMER 1 2 due to divorce or separation (see instrs). . . . Dependents on 6c not entered above. . Add numbers on lines claimed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . above. . . . . . G 542-12-3232 Son 546-31-3327 Daughter X X d Total number of exemptions 7 Wages, salaries, tips, etc. Attach Form(s) W-2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Income 8 a Taxable interest. Attach Schedule B if required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8a b Tax-exempt interest. Do not include on line 8a. . . . . . . . . . . . . . 8b 9 a Ordinary dividends. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9a Attach Form(s) b Qualified dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9b W-2 here. Also attach Forms 10 Taxable refunds, credits, or offsets of state and local income taxes . . . . . . . . . . . . . . . . . . . . . 10 W-2G and 1099-R 11 Alimony received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 if tax was withheld. 12 Business income or (loss). Attach Schedule C or C-EZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 If you did not 13 Capital gain or (loss). Att Sch D if reqd. If not reqd, ck here . . . . . . . . . . . . . . . . . . . . . . . . G 13 get a W-2, 14 Other gains or (losses). Attach Form 4797. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 see instructions. 15 a IRA distributions. . . . . . . . . . . . 15 a b Taxable amount. . . . . . . . . . . . . 15 b 16 a Pensions and annuities . . . . . 16 a b Taxable amount. . . . . . . . . . . . . 16 b 17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E. 17 18 Farm income or (loss). Attach Schedule F. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 19 Unemployment compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 20 a Social security benefits . . . . . . . . . . 20 a b Taxable amount. . . . . . . . . . . . . 20 b 21 Other income 21 22 Combine the amounts in the far right column for lines 7 through 21. This is your total income. . . . . . . . . . . . . G 22 23 Educator expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Adjusted 24 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 or 2106-EZ . . . . . . . . . . . . . . . . . . . . 24 Gross 25 Health savings account deduction. Attach Form 8889. . . . . . . . 25 Income 26 Moving expenses. Attach Form 3903 . . . . . . . . . . . . . . . . . . . . . . . 26 27 Deductible part of self-employment tax. Attach Schedule SE. . . . . . . . . . . . . . 27 8,604. 28 Self-employed SEP, SIMPLE, and qualified plans. . . . . . . . . . . 28 29 Self-employed health insurance deduction. . . . . . . . . . . . . . . . . . 29 30 Penalty on early withdrawal of savings . . . . . . . . . . . . . . . . . . . . . 30 31,203. 31 a Alimony paid b Recipient’s SSN . . . . G 121-43-4341 31 a 240,000. 32 IRA deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 33 Student loan interest deduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 34 Tuition and fees. Attach Form 8917 . . . . . . . . . . . . . . . . . . . . . . . . 34 10,219. 35 Domestic production activities deduction. Attach Form 8903. . . . . . . . . . . . . . 35 36 Add lines 23 through 35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 37 Subtract line 36 from line 22. This is your adjusted gross income. . . . . . . . . . . . . . . . . . . . . G 37 BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. FDIA0112L 12/29/14 3 750,000. 114,217. 303. 191,095. 312,032. 1,367,647. 290,026. 1,077,621. Form 1040 (2014) Form 1040 (2014) Tax and Credits Standard Deduction for ‘ ? People who check any box on line 39a or 39b or who can be claimed as a dependent, see instructions. ? All others: Single or Married filing separately, $6,200 Married filing jointly or Qualifying widow(er), $12,400 Head of household, $9,100 Other Taxes Payments If you have a qualifying child, attach Schedule EIC. Refund Direct deposit? See instructions. Amount You Owe Third Party Designee Sign Here Joint return? See instructions. Keep a copy for your records. JOSEPH D PLUMMER 38 Amount from line 37 (adjusted gross income). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 a Check You were born before January 2, 1950, Blind. Total boxes Spouse was born before January 2, 1950, if: Blind. checked G 39 a b If your spouse itemizes on a separate return or you were a dual-status alien, check here . . . . . . . . . G 39 b Itemized deductions (from Schedule A) or your standard deduction (see left margin) . . . . . . . . . . . . . . . . . . . . Subtract line 40 from line 38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exemptions. If line 38 is $152,525 or less, multiply $3,950 by the number on line 6d. Otherwise, see instrs. . . . . . Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Tax (see instrs). Check if any from: a c Form(s) 8814 b Form 4972 . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Alternative minimum tax (see instructions). Attach Form 6251. . . . . . . . . . . . . . . . . . . . . . . . . . 46 Excess advance premium tax credit repayment. Attach Form 8962. . . . . . . . . . . . . . . . . . . . . . 47 Add lines 44, 45 and 46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G 48 Foreign tax credit. Attach Form 1116 if required. . . . . . . . . . . . . 48 49 Credit for child and dependent care expenses. Attach Form 2441 . . . . . . . . . . 49 50 Education credits from Form 8863, line 19. . . . . . . . . . . . . . . . . . 50 51 Retirement savings contributions credit. Attach Form 8880. . . 51 52 Child tax credit. Attach Schedule 8812, if required . . . . . . . . . . 52 53 Residential energy credits. Attach Form 5695. . . . . . . . . . . . . . . 53 40 41 42 43 54 Other crs from Form: a 54 3800 b 8801 c 55 Add lines 48 through 54. These are your total credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Subtract line 55 from line 47. If line 55 is more than line 47, enter -0-. . . . . . . . . . . . . . . . . . G 57 Self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Unreported social security and Medicare tax from Form: a 8919. . . . . . . . . . . . . . . . . . . . . . . 4137 b 59 Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required. . . . . . . . . . . . . . . . . . . 60 a Household employment taxes from Schedule H. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b First-time homebuyer credit repayment. Attach Form 5405 if required . . . . . . . . . . . . . . . . . . . X ……….. 61 Health care: individual responsibility (see instructions) Full-year coverage 62 Taxes from: a X Form 8959 b Form 8960 c Instrs; enter code(s) 63 Add lines 56-62. This is your total tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G 64 Federal income tax withheld from Forms W-2 and 1099 . . . . . 64 236,250. 65 2014 estimated tax payments and amount applied from 2013 return. . . . . . . . 65 66 a Earned income credit (EIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 a b Nontaxable combat pay election . . . . . G 66 b 67 Additional child tax credit. Attach Schedule 8812. . . . . . . . . . . . 67 68 American opportunity credit from Form 8863, line 8. . . . . . . . . 68 69 Net premium tax credit. Attach Form 8962. . . . . . . . . . . . . . . . . . 69 70 Amount paid with request for extension to file . . . . . . . . . . . . . . 70 71 Excess social security and tier 1 RRTA tax withheld. . . . . . . . . 71 72 Credit for federal tax on fuels. Attach Form 4136. . . . . . . . . . . . 72 73 Credits from Form: a 73 Reserved c Reserved d 2439 b 74 Add lns 64, 65, 66a, & 67-73. These are your total pmts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G 75 If line 74 is more than line 63, subtract line 63 from line 74. This is the amount you overpaid . . . . . . . . . . . . . . . 76 a Amount of line 75 you want refunded to you. If Form 8888 is attached, check here. . G G b Routing number . . . . . . . . XXXXXXXXXX G c Type: Checking Savings G d Account number. . . . . . . . XXXXXXXXXXXXXXXXXXXXXXXX 77 Amount of line 75 you want applied to your 2015 estimated tax. . . . . . . . G 77 78 Amount you owe. Subtract line 74 from line 63. For details on how to pay, see instructions. . . . . . . . . . . . . . . G 79 Estimated tax penalty (see instructions). . . . . . . . . . . . . . . . . . . . 79 Do you want to allow another person to discuss this return with the IRS (see instructions)?. . . . . . . . . . . Designee’s name FDIA0112L 12/29/14 Phone no. G 40 41 42 575,325. 502,296. 0. 43 502,296. 44 45 46 47 151,182. 240. 151,422. 55 56 57 58 59 60 a 60 b 61 62 63 151,422. 17,208. 6,538. 175,168. 236,250. 61,082. 61,082. 74 75 76 a 78 X No Yes. Complete below. Personal identification number (PIN) G G Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Your signature Date Your occupation Daytime phone number A Spouse’s signature. If a joint return, both must sign. Print/Type preparer’s name Paid Preparer Use Only Page 2 133-50-5453 38 1,077,621. SALESMAN Date Preparer’s signature Self-Prepared Firm’s name If the IRS sent you an Identity Protection PIN, enter it here (see instrs) Spouse’s occupation Date Check if PTIN self-employed G Firm’s address G Firm’s EIN G Phone no. Form 1040 (2014) SCHEDULE A OMB No. 1545-0074 Itemized Deductions (Form 1040) Department of the Treasury Internal Revenue Service (99) 2014 G Information about Schedule A and its separate instructions is at www.irs.gov/schedulea. G Attach to Form 1040. Attachment Sequence No. Name(s) shown on Form 1040 Your social security number JOSEPH D PLUMMER 133-50-5453 Medical and Dental Expenses Taxes You Paid Interest You Paid Note. Your mortgage interest deduction may be limited (see instructions). Gifts to Charity If you made a gift and got a benefit for it, see instructions. 1 2 3 07 Caution. Do not include expenses reimbursed or paid by others. Medical and dental expenses (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Enter amount from Form 1040, line 38. . . . . . 2 Multiply line 2 by 10% (.10). But if either you or your spouse was born before 3 January 2, 1950, multiply line 2 by 7.5% (.075) instead 4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . 5 State and local (check only one box): a X Income taxes, or 5 50,250. ………………………… b General sales taxes 6 Real estate taxes (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . 6 25,221. 7 Personal property taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 8 Other taxes. List type and amount G 8 9 Add lines 5 through 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Home mtg interest and points reported to you on Form 1098. . . . . . . . . . . . . . . . 11 Home mortgage interest not reported to you on Form 1098. If paid to the person from whom you bought the home, see instructions and show that person’s name, identifying number, and address G 10 4 0. 9 75,471. 93,212. 11 28,443. 12 12 Points not reported to you on Form 1098. See instrs for spcl rules. . . . . . . . . . . . 13 Mortgage insurance premiums (see instructions) . . . . . . . . . . . . . . 13 14 Investment interest. Attach Form 4952 if required. 14 (See instrs.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Add lines 10 through 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 16 Gifts by cash or check. If you made any gift of $250 or more, see instrs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,655. 16 17 Other than by cash or check. If any gift of $250 or more, see instructions. You must attach Form 8283 if over $500. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18 Carryover from prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 19 0. 20 Casualty or theft loss(es). Attach Form 4684. (See instructions.). . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Job Expenses 21 Unreimbursed employee expenses ‘ job travel, union dues, job education, etc. Attach Form 2106 or 2106-EZ if and Certain Miscellaneous required. (See instructions.) G Deductions 21 22 Tax preparation fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 500. 23 Other expenses ‘ investment, safe deposit box, etc. List type and amount G 402,138. 19 Add lines 16 through 18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Casualty and Theft Losses Other Miscellaneous Deductions Total Itemized Deductions 24 25 26 27 28 23 24 Add lines 21 through 23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500. 1,077,621. Enter amount from Form 1040, line 38. . . . . 25 26 Multiply line 25 by 2% (.02) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,552. Subtract line 26 from line 24. If line 26 is more than line 24, enter -0- . . . . . . . . . . . . . . . . . . . . . . 27 Other ‘ from list in instructions. List type and amount G 28 29 Is Form 1040, line 38, over $152,525? Reduction No. Your deduction is not limited. Add the amounts in the far right column -23,939. for lines 4 through 28. Also, enter this amount on Form 1040, line 40. 29 ………………….. Yes. Your deduction may be limited. See the Itemized Deductions Worksheet X in the instructions to figure the amount to enter. 30 If you elect to itemize deductions even though they are less than your standard deduction, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G BAA For Paperwork Reduction Act Notice, see Form 1040 instructions. FDIA0301L 12/29/14 0. 0. 575,325. Schedule A (Form 1040) 2014 SCHEDULE B (Form 1040A or 1040) Department of the Treasury Internal Revenue Service (99) 2014 G Attach to Form 1040A or 1040. G Information about Schedule B and its instructions is at www.irs.gov/scheduleb. Name(s) shown on return Attachment Sequence No. 1 133-50-5453 Amount List name of payer. If any interest is from a seller-financed mortgage and the buyer used the property as a personal residence, see the instructions and list this interest first. Also, show that buyer’s social security number and address G BANK OF AMERICA CEDAR BANK COMMERCE VALLEY BANK WELLS FARGO (See instructions for Form 1040A, or Form 1040, line 8a.) Note. If you received a Form 1099-INT, Form 1099-OID, or substitute statement from a brokerage firm, list the firm’s name as the payer and enter the total interest shown on that form. 5. 81,221. 32,932. 59. 1 2 3 Add the amounts on line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Excludable interest on series EE and I U.S. savings bonds issued after 1989. Attach Form 8815 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Subtract line 3 from line 2. Enter the result here and on Form 1040A, or Form 1040, line 8a. . . . . . . . . . . . . . . . . . G Note. If line 4 is over $1,500, you must complete Part III. Part II 08 Your social security number JOSEPH D PLUMMER Part I Interest OMB No. 1545-0074 Interest and Ordinary Dividends 5 2 3 4 114,217. 114,217. Amount List name of payer G AMERICAN GENERAL 303. Ordinary Dividends (See instructions for Form 1040A, or Form 1040, line 9a.) Note. If you received a Form 1099-DIV or substitute statement from a brokerage firm, list the firm’s name as the payer and enter the ordinary dividends shown on that form. 5 6 Add the amounts on line 5. Enter the total here and on Form 1040A, or Form 1040, line 9a. . . . . . . . . . . . . . . . . . . G Note. If line 6 is over $1,500, you must complete Part III. You must complete this part if you (a) had over $1,500 of taxable interest or ordinary dividends; (b) had a foreign account; or (c) received a distribution from, or were a grantor of, or a transferor to, a foreign trust. Part III Foreign Accounts and Trusts (See instructions.) 303. 6 7 a At any time during 2014, did you have a financial interest in or signature authority over a financial account (such as a bank account, securities account, or brokerage account) located in a foreign country? See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If ‘Yes,’ are you required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), to report that financial interest or signature authority? See FinCEN Form 114 and its instructions for filing requirements and exceptions to those requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b If you are required to file FinCEN Form 114, enter the name of the foreign country where the financial Yes No X account is locate

Description

4) The Pre-Audit Phone Call (due March 3 before class) Assume that you will be using a classic investigative technique – the Surprise Phone Call. You call the taxpayer at his home or his work. You identify yourself, gently state that his 2014 return has been selected for review, and that you are calling to set up an appointment in the next few weeks to meet with him at his residence for a few hours. After he recovers from the initial shock of the news, you ask him if he has few minutes to go over some preliminary matters before you come out so as to help narrow your audit to no more than what is absolutely necessary. Assume he agrees to answer your questions. List fifteen (15) questions you would like to ask in order of importance to pin the facts down before the taxpayer gets a chance to speak to a representative. Remember, once he hires a representative, your questions will primarily be answered by the representative.

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ACCT 542 Homework Project
Spring Semester 2021
Accompanying these instructions is a mock 2014 tax return of Joe D. Plummer. This
homework project has 4 due dates beginning next week and each week thereafter. I have
highlighted the due dates below.
Instructions
Pretend you are an IRS Revenue Agent and have been assigned Mr. Plummer’s tax return for
examination (audit). The return contains various entries which you will need to carefully
examine.
This is not a group project. You should email me your responses to the questions before each
class begins on the dates specified below.
The return was filed on 4/15/2015 and contains the following forms and schedules: Form 1040
& Schedules A, B, C & SE. It was prepared by the taxpayer himself on Turbo Tax. Assume it
was filed with the IRS as you see it, even though it contains some missing information. Assume
it was signed by the taxpayer, and had a W-2 attached to it issued by ABC Construction Corp.,
555 South Victoria Ave., Ventura, CA and that the W-2 was for $1,500,000.
Review Form 1040 and each schedule carefully. See if any of the information from one
schedule might relate to another schedule – in other words, given what you see in one
schedule, does that information correspond or conflict with information on another schedule.
What makes this exam different from most of your past exams at CSUN is that there is no right
and wrong answer. This project requires that you make certain inferences from the information
you are provided and then make some factual assumptions or suppositions about the taxpayer,
his lifestyle, his assets, his business dealings, his sources of income, his expenses, the nature
of his business, the nature of his income, etc.
This project requires you to use your common sense and everyday experiences, as well as your
basic business, accounting and tax knowledge. What I am looking for most is your analysis,
followed by the organization of your answers.
1) Prepare a written Pre-Audit Analysis as follows (due Feb 10 before class) :
a. Identify and prepare a list of all the items on the tax return that appear to be strange,
unusual, questionable, excessively large or excessively small in relation to other information on
the return, etc. To do this, provide a one or two sentence explanation for each such item. That
is, tell me why you identified the item & what the item tells you about the taxpayer (meaning,
about his assets, about his income, about his standard of living/life style, etc.) Also, tell me if
you are drawing any inferences from the dollar value of the item, how it is labeled/described on
the tax return, how it is being reported or deducted.
2) Prepare an Audit Plan (due Feb 17 before class)
a. Prepare a list of twelve (12) deductions shown on the return that you want to audit. For each
of these deductions that you list, provide a one or two sentences for each explaining why you
have identified the deduction. In other words, explain why you feel there is a possibility the
deduction may be improper/non-deductible, excessive/not reasonable, etc.
b. Prepare a list of five (5) income items shown on the return that you plan ask about during
your interview of the taxpayer or his representative. For each item, explain in one or two
sentences why you selected these items and what inferences you are drawing from the amount
of income, from the manner in which it is reported, from the label that is placed on it, from the
category of income it falls under, etc.
3) Document Request and Background Research (due Feb 24 before class)
c. For each of the 12 deduction items and 5 income items that you have selected for audit, list
in a few sentences list:
i. What documents you are requesting that the taxpayer provide to you
during the audit appointment(s) for each of the items you identified that you
are examining/auditing.
ii. What public records you will review before your interview to be armed
with information so that you know whether the taxpayer or his
representative is being truthful.
iii. What internal IRS reports/transcripts can you review in order to
determine if the taxpayer reported all of his income and to determine the
source of his income in case the source is not clear on the return.
iv. With respect to the 12 deductions, make one or two assumptions of
what the taxpayer might tell you or the documents he might provide that
would make the deduction entirely non-deductible (other than lack of proof
of payment) or partially non-deductible. Tell me what your assumption(s)
is/are and how that would influence the outcome of whether that particular
expense is deductible.
v. With respect to the 5 income items, make one or two assumptions
about what the taxpayer might tell you about the source or nature of the
income. In other words, give me one or two examples of what the taxpayer
might say that may lead you to believe that:
1. there may be other unreported income
2. there may be related persons or entities whose information may
shed more light on this taxpayer and/or his income from other
sources. If so,
a. what information or documents will you ask for relating to
such related persons or entities.
b. are there any related party documents you wish to review,
if so please explain in one or two sentences what these
documents might be and what they might reflect about the
taxpayer, his business dealings, etc.
4) The Pre-Audit Phone Call (due March 3 before class)
Assume that you will be using a classic investigative technique – the Surprise Phone Call.
You call the taxpayer at his home or his work. You identify yourself, gently state that his 2014
return has been selected for review, and that you are calling to set up an appointment in the
next few weeks to meet with him at his residence for a few hours. After he recovers from the
initial shock of the news, you ask him if he has few minutes to go over some preliminary matters
before you come out so as to help narrow your audit to no more than what is absolutely
necessary. Assume he agrees to answer your questions.
List fifteen (15) questions you would like to ask in order of importance to pin the facts down
before the taxpayer gets a chance to speak to a representative. Remember, once he hires a
representative, your questions will primarily be answered by the representative.
Good luck and keep in mind the following general directives of the IRS:
The mission of the IRS is to “Provide America’s taxpayers top quality service by helping them
understand and meet their tax responsibilities and by applying the tax law with integrity and
fairness to all.” This mission statement describes the IRS’ role and the public’s expectation
about how the IRS should perform that role.
•
•
•
In the United States, the Congress passes tax laws and requires taxpayers to comply.
The taxpayer’s role is to understand and meet his or her tax obligations.
The IRS’ role is to help the large majority of compliant taxpayers with the tax law, while
ensuring that the minority who are unwilling to comply pay their fair share.
How this plays out in the tax audit world is as follows:
1. It is the Revenue Agent’s duty to help achieve the taxpayer’s compliance with the tax laws.
2. The Revenue Agent must be courteous but firm with taxpayers
3. When a tax issue can go either way, the Revenue Agent must protect the interests of the
government.
4. Unless otherwise told to do so, a Revenue Agent must not spend too much time on matters that
will not yield tax dollars for the government.
5. The Revenue Agent must try to close the case in 6 months or less when possible, and if that is
not possible, he/she must articulate to management why additional time is needed.
And these more specific guidelines from the Internal Revenue Manual [next page]
Section 4.10.2.3 (08-01-2007) — In-depth Pre-contact Analysis
1.
The examiner is responsible for determining the scope of the audit, beginning with the issues identified by
the classifier on the classification check sheet. The examiner must perform a pre-contact analysis including
a thorough review of the case file to identify large, unusual, or questionable items (LUQs) beyond those
selected on the classification check sheet. The examiner should take the following actions:
A.
Review the complete tax return including line items, credits, the balance sheet, elections and
schedules, and any other items attached to the return.
B.
[omitted]
C.
Review internal and external data from the following sources:
IRP Transcripts,
Asset locator / people locator, and
Internet Research.
D.
[omitted]
————————————–Section 4.10.2.3.1 (08-01-2007) – Large Unusual Questionable Items (LUQs) Defined
1.
The definition of a large, unusual, or questionable item will depend on the examiner’s perception of the
return as a whole and the separate items that comprise the return. Some factors to be considered when
identifying LUQs are:
A.
Comparative size of the item — an expense item of $6,000.00 with total expenses of $30,000.00
would be a large item; however, if total expenses are $300,000.00, the item would not be generally
considered a large item.
B.
Absolute size of the item — despite the comparability factor, size by itself may be significant. For
example, a $50,000 item may be significant even though it represents a small percentage of
taxable income.
C.
Inherent character of the item — although the amount of an item may be insignificant, the nature of
the item may be significant, e.g., airplane expenses claimed on a plumber’s Schedule C.
D.
Evidence of intent to mislead — this may include missing schedules, incomplete schedules, misclassified entries, or obviously incorrect items on the return.
E.
Beneficial effect of the manner in which an item is reported — expenses claimed on a business
schedule rather than claimed as an itemized deduction.
F.
Relationship to other items — incomplete transactions identified on the tax return. For example, the
taxpayer reported sales of stock but no dividend income.
G.
Whipsaw issues — occur when there is a transaction between two parties and characteristics of
the transaction will benefit one party and harm the other. Examples include alimony vs. child
support, sale vs. rental/royalty, employee vs. independent contractor, gift vs. income.
H.
[omitted]
I.
Missing items — consideration should be given to items which are not shown on the return but
would normally appear on the returns of similar taxpayers. This applies not only to the examination
of income, but also to expenses, deductions, etc., that would result in tax changes favorable to the
taxpayer.
Form
1040
Department of the Treasury
‘ Internal Revenue Service
(99)
U.S. Individual Income Tax Return
For the year Jan 1 – Dec 31, 2014, or other tax year beginning
2014
, 2014, ending
Your first name and initial
OMB No. 1545-0074 IRS Use Only
, 20
‘ Do not write or staple in this space.
See separate instructions.
Last name
Your social security number
JOSEPH D PLUMMER
133-50-5453
If a joint return, spouse’s first name and initial
Last name
Spouse’s social security number
Home address (number and street). If you have a P.O. box, see instructions.
Apartment no.
3501 CARIBEH DRIVE
City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions).
ENCINO, CA 91436
Foreign country name
Foreign province/state/county
Foreign postal code
J
Make sure the SSN(s) above
and on line 6c are correct.
Presidential Election Campaign
Check here if you, or your spouse if filing
jointly, want $3 to go to this fund. Checking
a box below will not change your tax or
refund.
You
Filing Status
Check only
one box.
Exemptions
1
2
3
Single
4
Married filing jointly (even if only one had income)
Married filing separately. Enter spouse’s SSN above & full
name here. . G
5
Spouse
X Head of household (with qualifying person). (See
instructions.) If the qualifying person is a child
but not your dependent, enter this child’s
name here. .. G
Qualifying widow(er) with dependent child
6a X Yourself. If someone can claim you as a dependent, do not check box 6a. . . . . . . . . . .
Boxes checked
on 6a and 6b. . .
No. of children
on 6c who:
b
Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) b if
(2) Dependent’s
(3) Dependent’s
c Dependents:
child under ? lived
social security
relationship
age 17
with you. . . . . .
number
to you
qualifying for
child tax cr ? did not
Last
name
(1) First name
(see instrs) live with you
If more than four
dependents, see
instructions and
check here. . . G
JOSEPH PLUMMER II
JOSEPHINE PLUMMER
1
2
due to divorce
or separation
(see instrs). . . .
Dependents
on 6c not
entered above. .
Add numbers
on lines
claimed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . above. . . . . . G
542-12-3232 Son
546-31-3327 Daughter
X
X
d Total number of exemptions
7 Wages, salaries, tips, etc. Attach Form(s) W-2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Income
8 a Taxable interest. Attach Schedule B if required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8a
b Tax-exempt interest. Do not include on line 8a. . . . . . . . . . . . . .
8b
9 a Ordinary dividends. Attach Schedule B if required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9a
Attach Form(s)
b Qualified dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9b
W-2 here. Also
attach Forms
10 Taxable refunds, credits, or offsets of state and local income taxes . . . . . . . . . . . . . . . . . . . . . 10
W-2G and 1099-R
11 Alimony received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
if tax was withheld.
12 Business income or (loss). Attach Schedule C or C-EZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
If you did not
13 Capital gain or (loss). Att Sch D if reqd. If not reqd, ck here . . . . . . . . . . . . . . . . . . . . . . . . G
13
get a W-2,
14 Other gains or (losses). Attach Form 4797. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
see instructions.
15 a IRA distributions. . . . . . . . . . . . 15 a
b Taxable amount. . . . . . . . . . . . . 15 b
16 a Pensions and annuities . . . . . 16 a
b Taxable amount. . . . . . . . . . . . . 16 b
17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E. 17
18 Farm income or (loss). Attach Schedule F. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
19 Unemployment compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
20 a Social security benefits . . . . . . . . . . 20 a
b Taxable amount. . . . . . . . . . . . . 20 b
21 Other income
21
22 Combine the amounts in the far right column for lines 7 through 21. This is your total income. . . . . . . . . . . . . G 22
23 Educator expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Adjusted
24 Certain business expenses of reservists, performing artists, and fee-basis
government officials. Attach Form 2106 or 2106-EZ . . . . . . . . . . . . . . . . . . . . 24
Gross
25 Health savings account deduction. Attach Form 8889. . . . . . . . 25
Income
26 Moving expenses. Attach Form 3903 . . . . . . . . . . . . . . . . . . . . . . . 26
27 Deductible part of self-employment tax. Attach Schedule SE. . . . . . . . . . . . . . 27
8,604.
28 Self-employed SEP, SIMPLE, and qualified plans. . . . . . . . . . . 28
29 Self-employed health insurance deduction. . . . . . . . . . . . . . . . . . 29
30 Penalty on early withdrawal of savings . . . . . . . . . . . . . . . . . . . . . 30
31,203.
31 a Alimony paid b Recipient’s SSN . . . . G 121-43-4341
31 a
240,000.
32 IRA deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
33 Student loan interest deduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
34 Tuition and fees. Attach Form 8917 . . . . . . . . . . . . . . . . . . . . . . . . 34
10,219.
35 Domestic production activities deduction. Attach Form 8903. . . . . . . . . . . . . . 35
36 Add lines 23 through 35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
37 Subtract line 36 from line 22. This is your adjusted gross income. . . . . . . . . . . . . . . . . . . . . G 37
BAA For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions.
FDIA0112L 12/29/14
3
750,000.
114,217.
303.
191,095.
312,032.
1,367,647.
290,026.
1,077,621.
Form 1040 (2014)
Form 1040 (2014)
Tax and
Credits
Standard
Deduction
for ‘
? People who
check any box
on line 39a or
39b or who can
be claimed as a
dependent, see
instructions.
? All others:
Single or
Married filing
separately,
$6,200
Married filing
jointly or
Qualifying
widow(er),
$12,400
Head of
household,
$9,100
Other
Taxes
Payments
If you have a
qualifying
child, attach
Schedule EIC.
Refund
Direct deposit?
See instructions.
Amount
You Owe
Third Party
Designee
Sign
Here
Joint return?
See instructions.
Keep a copy
for your records.
JOSEPH D PLUMMER
38 Amount from line 37 (adjusted gross income). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39 a Check
You were born before January 2, 1950,
Blind.
Total boxes
Spouse was born before January 2, 1950,
if:
Blind.
checked G 39 a
b If your spouse itemizes on a separate return or you were a dual-status alien, check here . . . . . . . . . G 39 b
Itemized deductions (from Schedule A) or your standard deduction (see left margin) . . . . . . . . . . . . . . . . . . . .
Subtract line 40 from line 38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exemptions. If line 38 is $152,525 or less, multiply $3,950 by the number on line 6d. Otherwise, see instrs. . . . . .
Taxable income. Subtract line 42 from line 41.
If line 42 is more than line 41, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44 Tax (see instrs). Check if any from:
a
c
Form(s) 8814
b
Form 4972 . . . . . . . . . . . . . . . . . . . . . . . . . . .
45 Alternative minimum tax (see instructions). Attach Form 6251. . . . . . . . . . . . . . . . . . . . . . . . . .
46 Excess advance premium tax credit repayment. Attach Form 8962. . . . . . . . . . . . . . . . . . . . . .
47 Add lines 44, 45 and 46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G
48 Foreign tax credit. Attach Form 1116 if required. . . . . . . . . . . . .
48
49 Credit for child and dependent care expenses. Attach Form 2441 . . . . . . . . . .
49
50 Education credits from Form 8863, line 19. . . . . . . . . . . . . . . . . .
50
51 Retirement savings contributions credit. Attach Form 8880. . .
51
52 Child tax credit. Attach Schedule 8812, if required . . . . . . . . . .
52
53 Residential energy credits. Attach Form 5695. . . . . . . . . . . . . . .
53
40
41
42
43
54 Other crs from Form: a
54
3800 b
8801 c
55 Add lines 48 through 54. These are your total credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56 Subtract line 55 from line 47. If line 55 is more than line 47, enter -0-. . . . . . . . . . . . . . . . . . G
57 Self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58 Unreported social security and Medicare tax from Form: a
8919. . . . . . . . . . . . . . . . . . . . . . .
4137 b
59 Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required. . . . . . . . . . . . . . . . . . .
60 a Household employment taxes from Schedule H. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b First-time homebuyer credit repayment. Attach Form 5405 if required . . . . . . . . . . . . . . . . . . .
X ………..
61 Health care: individual responsibility (see instructions) Full-year coverage
62 Taxes from: a X Form 8959 b
Form 8960 c
Instrs; enter code(s)
63 Add lines 56-62. This is your total tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G
64 Federal income tax withheld from Forms W-2 and 1099 . . . . .
64
236,250.
65 2014 estimated tax payments and amount applied from 2013 return. . . . . . . .
65
66 a Earned income credit (EIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66 a
b Nontaxable combat pay election . . . . . G 66 b
67 Additional child tax credit. Attach Schedule 8812. . . . . . . . . . . .
67
68 American opportunity credit from Form 8863, line 8. . . . . . . . .
68
69 Net premium tax credit. Attach Form 8962. . . . . . . . . . . . . . . . . .
69
70 Amount paid with request for extension to file . . . . . . . . . . . . . .
70
71 Excess social security and tier 1 RRTA tax withheld. . . . . . . . .
71
72 Credit for federal tax on fuels. Attach Form 4136. . . . . . . . . . . .
72
73 Credits from Form: a
73
Reserved c
Reserved d
2439 b
74 Add lns 64, 65, 66a, & 67-73. These are your total pmts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G
75 If line 74 is more than line 63, subtract line 63 from line 74. This is the amount you overpaid . . . . . . . . . . . . . . .
76 a Amount of line 75 you want refunded to you. If Form 8888 is attached, check here. . G
G b Routing number . . . . . . . . XXXXXXXXXX
G c Type:
Checking
Savings
G d Account number. . . . . . . . XXXXXXXXXXXXXXXXXXXXXXXX
77 Amount of line 75 you want applied to your 2015 estimated tax. . . . . . . . G 77
78 Amount you owe. Subtract line 74 from line 63. For details on how to pay, see instructions. . . . . . . . . . . . . . . G
79 Estimated tax penalty (see instructions). . . . . . . . . . . . . . . . . . . .
79
Do you want to allow another person to discuss this return with the IRS (see instructions)?. . . . . . . . . . .
Designee’s
name
FDIA0112L
12/29/14
Phone
no.
G
40
41
42
575,325.
502,296.
0.
43
502,296.
44
45
46
47
151,182.
240.
151,422.
55
56
57
58
59
60 a
60 b
61
62
63
151,422.
17,208.
6,538.
175,168.
236,250.
61,082.
61,082.
74
75
76 a
78
X No
Yes. Complete below.
Personal identification
number (PIN)
G
G
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and
belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Your signature
Date
Your occupation
Daytime phone number
A Spouse’s signature. If a joint return, both must sign.
Print/Type preparer’s name
Paid
Preparer
Use Only
Page 2
133-50-5453
38
1,077,621.
SALESMAN
Date
Preparer’s signature
Self-Prepared
Firm’s name
If the IRS sent you an Identity Protection PIN, enter
it here (see instrs)
Spouse’s occupation
Date
Check
if
PTIN
self-employed
G
Firm’s address G
Firm’s EIN G
Phone no.
Form 1040 (2014)
SCHEDULE A
OMB No. 1545-0074
Itemized Deductions
(Form 1040)
Department of the Treasury
Internal Revenue Service
(99)
2014
G Information about Schedule A and its separate instructions is at www.irs.gov/schedulea.
G Attach to Form 1040.
Attachment
Sequence No.
Name(s) shown on Form 1040
Your social security number
JOSEPH D PLUMMER
133-50-5453
Medical
and
Dental
Expenses
Taxes You
Paid
Interest
You Paid
Note.
Your mortgage
interest
deduction may
be limited (see
instructions).
Gifts to
Charity
If you made a
gift and got a
benefit for it,
see instructions.
1
2
3
07
Caution. Do not include expenses reimbursed or paid by others.
Medical and dental expenses (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Enter amount from Form 1040, line 38. . . . . .
2
Multiply line 2 by 10% (.10). But if either you or your spouse was born before
3
January 2, 1950, multiply line 2 by 7.5% (.075) instead
4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . .
5 State and local (check only one box):
a X Income taxes, or
5
50,250.
…………………………
b
General sales taxes
6 Real estate taxes (see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . .
6
25,221.
7 Personal property taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
8 Other taxes. List type and amount G
8
9 Add lines 5 through 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 Home mtg interest and points reported to you on Form 1098. . . . . . . . . . . . . . . .
11 Home mortgage interest not reported to you on Form 1098. If paid to the person
from whom you bought the home, see instructions and show that person’s name,
identifying number, and address G
10
4
0.
9
75,471.
93,212.
11
28,443.
12
12 Points not reported to you on Form 1098. See instrs for spcl rules. . . . . . . . . . . .
13 Mortgage insurance premiums (see instructions) . . . . . . . . . . . . . .
13
14 Investment interest. Attach Form 4952 if required.
14
(See instrs.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15 Add lines 10 through 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 Gifts by cash or check. If you made any gift of $250 or
more, see instrs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
121,655.
16
17 Other than by cash or check. If any gift of $250 or
more, see instructions. You must attach Form 8283 if
over $500. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
18 Carryover from prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
19
0.
20 Casualty or theft loss(es). Attach Form 4684. (See instructions.). . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Job Expenses 21 Unreimbursed employee expenses ‘ job travel, union dues,
job education, etc. Attach Form 2106 or 2106-EZ if
and Certain
Miscellaneous
required. (See instructions.) G
Deductions
21
22 Tax preparation fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
500.
23 Other expenses ‘ investment, safe deposit box, etc. List
type and amount G
402,138.
19 Add lines 16 through 18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Casualty and
Theft Losses
Other
Miscellaneous
Deductions
Total
Itemized
Deductions
24
25
26
27
28
23
24
Add lines 21 through 23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
500.
1,077,621.
Enter amount from Form 1040, line 38. . . . . 25
26
Multiply line 25 by 2% (.02) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,552.
Subtract line 26 from line 24. If line 26 is more than line 24, enter -0- . . . . . . . . . . . . . . . . . . . . . . 27
Other ‘ from list in instructions. List type and amount G
28
29 Is Form 1040, line 38, over $152,525?
Reduction
No. Your deduction is not limited. Add the amounts in the far right column
-23,939.
for lines 4 through 28. Also, enter this amount on Form 1040, line 40.
29
…………………..
Yes.
Your
deduction
may
be
limited.
See
the
Itemized
Deductions
Worksheet
X in the instructions to figure the amount to enter.
30 If you elect to itemize deductions even though they are less than your standard
deduction, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G
BAA For Paperwork Reduction Act Notice, see Form 1040 instructions.
FDIA0301L 12/29/14
0.
0.
575,325.
Schedule A (Form 1040) 2014
SCHEDULE B
(Form 1040A or 1040)
Department of the Treasury
Internal Revenue Service (99)
2014
G Attach to Form 1040A or 1040.
G Information about Schedule B and its instructions is at www.irs.gov/scheduleb.
Name(s) shown on return
Attachment
Sequence No.
1
133-50-5453
Amount
List name of payer. If any interest is from a seller-financed mortgage and the buyer used
the property as a personal residence, see the instructions and list this interest first. Also,
show that buyer’s social security number and address G
BANK OF AMERICA
CEDAR BANK
COMMERCE VALLEY BANK
WELLS FARGO
(See
instructions for
Form 1040A, or
Form 1040,
line 8a.)
Note. If you
received a Form
1099-INT, Form
1099-OID, or
substitute statement
from a brokerage
firm, list the firm’s
name as the payer
and enter the total
interest shown on
that form.
5.
81,221.
32,932.
59.
1
2
3
Add the amounts on line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excludable interest on series EE and I U.S. savings bonds issued after 1989. Attach
Form 8815 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 Subtract line 3 from line 2. Enter the result here and on Form 1040A, or Form 1040, line 8a. . . . . . . . . . . . . . . . . . G
Note. If line 4 is over $1,500, you must complete Part III.
Part II
08
Your social security number
JOSEPH D PLUMMER
Part I
Interest
OMB No. 1545-0074
Interest and Ordinary Dividends
5
2
3
4
114,217.
114,217.
Amount
List name of payer G
AMERICAN GENERAL
303.
Ordinary
Dividends
(See
instructions for
Form 1040A, or
Form 1040,
line 9a.)
Note. If you received
a Form 1099-DIV or
substitute statement
from a brokerage
firm, list the firm’s
name as the payer
and enter the
ordinary dividends
shown on that form.
5
6 Add the amounts on line 5. Enter the total here and on Form 1040A, or Form 1040, line 9a. . . . . . . . . . . . . . . . . . . G
Note. If line 6 is over $1,500, you must complete Part III.
You must complete this part if you (a) had over $1,500 of taxable interest or ordinary dividends; (b) had
a foreign account; or (c) received a distribution from, or were a grantor of, or a transferor to, a foreign trust.
Part III
Foreign
Accounts
and Trusts
(See
instructions.)
303.
6
7 a At any time during 2014, did you have a financial interest in or signature authority over a financial
account (such as a bank account, securities account, or brokerage account) located in a foreign country?
See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If ‘Yes,’ are you required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), to
report that financial interest or signature authority? See FinCEN Form 114 and its instructions for filing
requirements and exceptions to those requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b If you are required to file FinCEN Form 114, enter the name of the foreign country where the financial
Yes
No
X
account is locate