This website uses cookies to ensure you have the best experience. Learn more

Tax Research Essay

924 words - 4 pages

SUBJECT: Taxation of Award


Murray, a working U.S. citizen reported to the Environmental Protection Agency that his employer was illegally dumping chemicals into a river. Upon further review of the matter, Murray’s statements were conducted to be true and a penalty was given to his employer. After getting news about the penalty, Murray’s employer dismissed him from the organization and made an effort to prevent Murray from being able to work for any other employer. He later sued the company, and was compensated an award for “damages to his personal and professional reputation and for his mental suffering.” Murray defines his awarded damages as a recovery of his human capital ...view middle of the document...

” Commissioner v. Schleier, 515 U.S. 323, 328 (1995), exclusions from gross income in Section 104(a)(2) provides that gross income does not include:
“The amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal physical injuries or physical sickness”
The regulations under section 104(a)(2) provide in pertinent part: “damages received (whether by suit or agreement) means an amount received (other than workmen's compensation) through prosecution of a legal suit or action based upon tort or tort type rights, or through a settlement agreement entered into in lieu of such prosecution.” Furthermore, since 1996 it has further provided that, “purposes of this exclusion emotional distress shall not be treated as a physical injury or physical sickness.” Murphy vs. IRS and United States U.S.T.C 50, 531 (3 Jul, 2007).
Next, the courts have established which acts constitute the practice of compensation as a whistleblower award. Accordingly IRS: 63,060.10 state that, “Informants provide leads upon which the Criminal Investigation Division (CID) may base a criminal investigation. The most common informants are former spouses and fired employees.” This would allow Murray’s award from his former employer as a whistleblower.
In the present case of Murray’s award being excluded from gross income, the establishment of the law was justified in Justin W. Hansen, Petitioner vs. Commissioner 97 T.C.M 1447, (USTC 2009), “an individual could not exclude from income any portion of the proceeds received in settlement of several claims against his former employer. The agreements expressly provided that the taxpayer and his former employer entered into the agreement in order to resolve discrimination complaints.” However, if Murray’s award is determined by the judicial decision to be accepted as a...

Other assignments on Tax Research

Malaysia Goods And Services Tax Essay

2824 words - 12 pages is about individual tax. The first change is that the income tax rate is reduced by 1 to 3% for resident individuals depending on different levels of chargeable income since Year of Assessment (YA) 2015 (KPMG, 2014). This results in that tax payers with family and income of Rm4,000 per month will not have tax liability. Besides, the income tax rate for non-resident individuals is reduced by 1% from 26% to 25% (KPMG, 2014) Chargeable Income(RM

Mba, Employer Reimbursement, Tax Treatment Essay

1775 words - 8 pages Tax Research Assignment #1 Facts Ima Nurse is a registered nurse who has been working as a Medicare reimbursement specialist at a hospital since 2008. She has enrolled in an MBA program for two reasons: 1) to increase her financial knowledge and skills needed in her current position and 2) to increase her managerial skills in order to enhance her prospects of eventually obtaining her supervisor’s position. An MBA degree is not a specific

Commencement & Cessation Of A Business - A Tax Perspective

1779 words - 8 pages a business) to help us decide the period in which expenses can be claimed. DEFINITON OF A BUSINESS The Income Tax Act (ITA) 2007 defines business income as “An amount that a person derives from a business is income of that person” (Income Tax Act (ITA) 2007. s.CB 1(1)). Furthermore, a business is defined under s. YA 1 (ITA 2007) as “any profession, trade or undertaking carried on for profit”, however the actual accomplishment of

Tax Issues

668 words - 3 pages Corporate Taxes Tax Base For Resident and Foreign Companies VAT is applied in the same way to residents and non residents. For additional information, consult the Bureau of Internal Revenue.   Tax Rate Income Tax | The rate is 30% on net income but there are some preferential rates and exemptions. Preferential rates vary from 2 to 20%. Regional headquarters are taxed at 10%. | Capital Gains Tax | These are taxed like income, except those

Tax Shelter

275 words - 2 pages TAX SHELTER A “tax shelter” is a way of reducing your taxable income. This will reduce the payments you pay out to state and federal governments. Also, your method of using it can change depending on local and international tax laws. “In North America, a tax shelter is generally defined as any method that recovers more than $1 in tax for every $1 spent, within 4 years.” If you invest in an abusive tax shelter you can be penalized by the

Liberty Tax

799 words - 4 pages Marketing Management Kaplan University Louie Gill MMT150-03 Liberty Tax Service Introduction: Liberty Tax Service is a listed US based company that has flair in the preparation of the tax returns for the individuals as well as for the small businesses. The company “Liberty Tax Service” began its services in the year 1997 in Canada when John Hewitt acquired a tax franchisor of Canada, U&R Tax Depot. In the year 1998, the company

Tax Rates

336 words - 2 pages Tax rates The tables below set out tax rates applicable to individuals for the 2012 and 2013 taxation years, together with major personal tax credits for both years. Federal income tax rates — 2013 and 2012 2013 taxable income | Federal marginal tax rate | Up to $43,561 | 15% | $43,562 – up to $87,123 | 22% | $87,124 – up to $135,054 | 26% | $135,055 and over | 29% |   |   | 2012 taxable income | Federal marginal tax rate | Up to $42,707

Tax Credit’S

398 words - 2 pages Tax Credit’s When filing their income taxes each year, taxpayers may have different goals in mind. Some may want to lower the amount of taxes they owe, seek the largest refund possible or avoid paying more in taxes than they are legally required to pay. Tax credits can help you meet all of those goals. There are two types of credits available for taxpayers: refundable and nonrefundable. Both types of credits offer you the chance to lower the

Tax - Hedging Exercises

833 words - 4 pages FA06: Hedging (Exercises) FA06 Hedging: Exercises Exercise 1 – Hedging of an exposed receivable with a forward contract (no hedge accounting) Canuck Co., a Canadian public company, received an order for hockey sticks on October 1, 2013. Canuck sold hockey sticks to Eagle Co. for US $100,000 on November 1, 2013, with payment to be received on February 1, 2014. On November 1, Canuck Co. entered into a contract to deliver US $100,000

Wgu Cgc1 Additional Study Questions - Tax

581 words - 3 pages Current Tax System • Why do we have an income tax? o To fund government programs • What other types of taxes are individuals and/or professionals subject to? o Estate tax, gift tax, self-employment tax, social security, medicare, unemployment taxes, excise, sales & use, property • How do tax laws affect decisions made by individuals? Businesses? o May determine how much an individual decides to gift or donate, how and where they choose to

Advise Laurence On The Tax Consequences Of The Above Facts Referring To Appropriate Case Law And Legislation

915 words - 4 pages The issue is whether Laurence Wong (LW) is a resident of Australia for tax purposes from the period 1st of July 2009 until the 30th of June 2012, given that LW has been living and working abroad in Singapore from July 2009. Residence is an important consideration for this case as under s6-5(2) of the ITTA1997 if LW is a resident his income from all sources will be taxable in Australia whereas if he is a foreign resident his assessable income

Similar Documents

Tax Research Exercise Essay

585 words - 3 pages Tax Research Memorandum Date: September 8, 2014 To: John Smith From: Subject: Casualty Losses Summary of Facts John Smith and his girlfriend are at a party. John has several drinks with the understanding his girlfriend will be the designated driver. At the party, the couple has a fight and John’s girlfriend leaves with her friends. Knowing he has had too much to drink, John takes a two hour nap before he drives home. On his way

Income Tax Essay

923 words - 4 pages Income based property tax relief: Circuit breaker tax expenditures. Jeffline joseph Unit 8 project part 4: First draft final paper composition 2 graded assignment This paper explores four publish articles that report on result from research conducted on mechanisms used by states to provide income based property tax relief, commonly called circuit-breakers. The articles, however, vary

Corporate Income Tax Essay

1325 words - 6 pages : 120. * Income from a science research contract (this is the 4th year the enterprise receives income from this contract): 150 * Income from domestic contribution of equity capital to company B; enterprise X receives its share of income after company B pays CIT: 300. Calculate the CIT payable of the enterprise in the tax year. Given: * The enterpise has not organized a council for test and acceptance of innovations and improvements. * The

Sin Tax And Ealthcare Essay

1281 words - 6 pages international security.” The financial impact of the revenue to be generated by increasing sin tax to fund healthcare costs should also be discussed. Curtis Dubay (2009) stated that, “If Congress enacts sin taxes to pay for increased government spending, deficits will actually rise in the long run because these taxes inevitably raise less revenue than anticipated.” While research has shown that increasing sin taxes can result in an increase of