Write a draft internal memorandum addressing the issues raised in the interview.Also prepare a draft letter to the client based on your memo.
Your memorandum should be 1 to 3 pages; stating the essential facts, the issues, the conclusions. Also include any provision(s) of the internal Revenue Code that support your suggested conclusion. You may also include any other helpful administrative authority (IRS regulations, IRS rulings, court decisions, etc.) that you find in your research.
QUESTION:
Client is unemployed and a full time student at NEIU. During the year he received:
A tuition scholarship
A loan from his grandparents
Payment for painting a friends house
Cash dividends from stock that was given to him from his grandparents
He found a $100 bill in a library book
Analyze the taxability of these circumstances.
Sample solution
Dante Alighieri played a critical role in the literature world through his poem Divine Comedy that was written in the 14th century. The poem contains Inferno, Purgatorio, and Paradiso. The Inferno is a description of the nine circles of torment that are found on the earth. It depicts the realms of the people that have gone against the spiritual values and who, instead, have chosen bestial appetite, violence, or fraud and malice. The nine circles of hell are limbo, lust, gluttony, greed and wrath. Others are heresy, violence, fraud, and treachery. The purpose of this paper is to examine the Dante’s Inferno in the perspective of its portrayal of God’s image and the justification of hell.
In this epic poem, God is portrayed as a super being guilty of multiple weaknesses including being egotistic, unjust, and hypocritical. Dante, in this poem, depicts God as being more human than divine by challenging God’s omnipotence. Additionally, the manner in which Dante describes Hell is in full contradiction to the morals of God as written in the Bible. When god arranges Hell to flatter Himself, He commits egotism, a sin that is common among human beings (Cheney, 2016). The weakness is depicted in Limbo and on the Gate of Hell where, for instance, God sends those who do not worship Him to Hell. This implies that failure to worship Him is a sin.
God is also depicted as lacking justice in His actions thus removing the godly image. The injustice is portrayed by the manner in which the sodomites and opportunists are treated. The opportunists are subjected to banner chasing in their lives after death followed by being stung by insects and maggots. They are known to having done neither good nor bad during their lifetimes and, therefore, justice could have demanded that they be granted a neutral punishment having lived a neutral life. The sodomites are also punished unfairly by God when Brunetto Lattini is condemned to hell despite being a good leader (Babor, T. F., McGovern, T., & Robaina, K. (2017). While he commited sodomy, God chooses to ignore all the other good deeds that Brunetto did.
Finally, God is also portrayed as being hypocritical in His actions, a sin that further diminishes His godliness and makes Him more human. A case in point is when God condemns the sin of egotism and goes ahead to commit it repeatedly. Proverbs 29:23 states that “arrogance will bring your downfall, but if you are humble, you will be respected.” When Slattery condemns Dante’s human state as being weak, doubtful, and limited, he is proving God’s hypocrisy because He is also human (Verdicchio, 2015). The actions of God in Hell as portrayed by Dante are inconsistent with the Biblical literature. Both Dante and God are prone to making mistakes, something common among human beings thus making God more human.
To wrap it up, Dante portrays God is more human since He commits the same sins that humans commit: egotism, hypocrisy, and injustice. Hell is justified as being a destination for victims of the mistakes committed by God. The Hell is presented as being a totally different place as compared to what is written about it in the Bible. As a result, reading through the text gives an image of God who is prone to the very mistakes common to humans thus ripping Him off His lofty status of divine and, instead, making Him a mere human. Whether or not Dante did it intentionally is subject to debate but one thing is clear in the poem: the misconstrued notion of God is revealed to future generations.
References
Babor, T. F., McGovern, T., & Robaina, K. (2017). Dante’s inferno: Seven deadly sins in scientific publishing and how to avoid them. Addiction Science: A Guide for the Perplexed, 267.
Cheney, L. D. G. (2016). Illustrations for Dante’s Inferno: A Comparative Study of Sandro Botticelli, Giovanni Stradano, and Federico Zuccaro. Cultural and Religious Studies, 4(8), 487.
Verdicchio, M. (2015). Irony and Desire in Dante’s” Inferno” 27. Italica, 285-297.
Sample Answer
Sample Answer
Internal Memorandum
To: Tax Department
From: [Your Name], Tax Specialist
Date: [Date]
Subject: Taxability Analysis of Client’s Income Sources
Facts:
– Client is unemployed and a full-time student at NEIU.
– Received a tuition scholarship.
– Received a loan from grandparents.
– Received payment for painting a friend’s house.
– Received cash dividends from stock gifted by grandparents.
– Found a $100 bill in a library book.
Issues:
1. Whether the tuition scholarship is taxable income.
2. Tax treatment of the loan received from grandparents.
3. Taxation of payment for painting services rendered.
4. Treatment of cash dividends from gifted stock.
5. Tax implications of the $100 found in the library book.
Analysis & Conclusions:
1. Tuition Scholarship: Pursuant to IRC Section 117, a scholarship used for tuition and related expenses is generally excluded from taxable income if the recipient is a degree candidate. Therefore, the tuition scholarship received by the client should not be taxable.
2. Loan from Grandparents: Loans are not considered taxable income as they are expected to be repaid. The client’s loan from grandparents does not represent taxable income.
3. Payment for Painting Services: Payment received for services rendered, such as painting a friend’s house, constitutes taxable income under IRC Section 61. The client should report this income on their tax return.
4. Cash Dividends from Gifted Stock: Cash dividends received from stock gifted by grandparents are taxable income, per IRC Section 61. The dividends should be reported on the client’s tax return.
5. Found $100 Bill: Amounts found or received as gifts without an expectation of repayment are generally not taxable under federal tax law. The $100 found in the library book is unlikely to be considered taxable income.
Conclusion:
– The tuition scholarship and loan from grandparents are not taxable.
– Payment for painting services and cash dividends from gifted stock constitute taxable income.
– The $100 found in the library book is likely non-taxable.
Please review the analysis provided and feel free to reach out with any questions or additional information needed.
Draft Letter to Client
[Client’s Name]
[Client’s Address]
[City, State, Zip Code]
[Date]
Dear [Client’s Name],
Subject: Taxability Analysis of Your Income Sources
I hope this letter finds you well. Following a thorough review of your financial circumstances, I am writing to provide clarity on the tax treatment of various income sources you received during the year.
Based on our analysis:
1. The tuition scholarship you received for educational purposes is not considered taxable income under the Internal Revenue Code.
2. The loan you obtained from your grandparents does not constitute taxable income as it is expected to be repaid.
3. The payment you received for painting services rendered is taxable and should be reported on your tax return.
4. Cash dividends received from stock gifted by your grandparents are taxable income and should be included in your tax reporting.
5. The $100 bill found in the library book is likely non-taxable as it does not meet the criteria for taxable income.
Should you have any questions regarding these tax implications or require further assistance, please do not hesitate to contact me. Ensuring accurate reporting of your income sources is crucial for compliance with tax laws.
Thank you for your attention to this matter, and I remain available to address any queries you may have.
Warm regards,
[Your Name]
Tax Specialist
[Your Contact Information]
