Tax cases and internal research memo - Assignment Example

In this particular case, Artnell Company has faced obligation from the court of the United States regarding its transferee and tax payment. In this regard, it has been recognized that the issues has upraised from the deferral operations of its assets and liabilities. As an effect, it has been observed that the company has not been able to recognize its actual income due to irregularity. As a consequence, the company was not able to submit its due amount of tax. Correspondingly, the court of the United States has appealed for the penalty including the due tax amount of the Artnell Company.

CASE 2 In this case the United States court has filed a charge against the Federal partnership tax returns of the Tampa Bay Devil Rays, Ltd. In this regard, the partnership firm has not recorded its income items on the basis of deferral method, which has affected the taxation of the company. Under section 451, a lawsuit against the company was filed for not maintaining the yearly income receipt adequately. On the other hand, under section 446(c), taxpayers are liable to pay the computed taxable income.

In this regard, the United States court has recognized that $125,000 sponsor fee was unpaid. In this case, petitioner has kept all the record related to the income tax return on the accrual basis. The U.S. Supreme Court has identified the problem regarding the income of the firm. In this regard, the Supreme Court of the U.S. has sought for the cash receipts of includible amount. Moreover, during the inspection the Commissioner of the U.S. Supreme Court had asked for the receipts regarding installments including the due amounts as well as total payable amounts.

During that phase the company has unable to show the gross income for the year. At the same time, due to deferral of prepaid income, company was not able to reflect its deferral income. Thus, under the section 41