Reel Life in the Tax Classroom: Learning Through Movies

Editor: Annette Nellen, J.D., CPA

One of the challenges in the tax classroom is to develop students’ ability to recognize when a tax issue exists as a result of a situation/transaction so that the students can then research an answer or planning opportunity and communicate that idea. According to the AICPA Model Tax Curriculum, first developed in 1996 and significantly revised in 2007, a student completing the tax component of the body of knowledge for entry into the accounting profession should have the ability to:

• Draw supportable conclusions on tax issues by using research skills (including accessing and interpreting sources of authoritative support) to identify and evaluate strengths, weaknesses, and opportunities; and
• Communicate tax conclusions and recommendations in a clear and concise manner to relevant stakeholders.

This column describes the Movie Project, a project designed to be used in the first introductory tax class, which accomplishes the learning outcomes described above while engaging Generation Y’s digital interest and desire for collaboration.

Movies and Television in the Classroom

Simply put, movies and television provide material that instructors can use to illustrate real situations. Movies have been used for this purpose extensively in higher education in psychology, criminal justice, management, accounting, health information management, ethics, and English classrooms. Entire websites such as teachwithmovies.org, Allmovie.com, and Uk.imdb.com are dedicated to providing supporting material, including learning guides, lesson plans, and quizzes for hundreds of movies for use at the K–12 level.

The Movie Project, based on an idea presented at an American Taxation Association Mid-Year Meeting teaching session, has been used in various forms in alternating semesters over the past several years to drive home the fact that tax issues affect students as individual taxpayers every day in ways they may not realize. Currently, students watch the movies away from the classroom. However, an instructor may screen an entire movie or snippets of movies to accomplish many of the same objectives in an in-class activity. Federal copyright law specifically exempts teachers at public schools or nonprofit educational institutions who show lawfully purchased or rented copies of a movie in classroom instruction (17 U.S.C. §110(1)). The same exemption applies if the teacher wishes to show snippets from a number of movies by using each movie individually. However, it is illegal to circumvent technological measures that effectively control access to copyrighted works, such as digital locks, to make compilations of scenes from various movies (17 U.S.C. §1201(a)(1)(A)).

Specifics of the Project

To begin the project, students are assigned to four-person groups (experts disagree on the optimum size) with whom they will work on this and other projects. While groups can be formed in a number of ways (random, deck of cards, self-selection, grade continuum), a heterogeneous group (gender, ethnicity, academic performance, personality type) appears to be most productive, especially when the groups will work together over long periods of time or on complex projects. In the author’s class, an abbreviated Myers-Briggs test is administered to determine individual learning styles. The results are used to form groups with an appropriate mix of personality and learning styles.

In order to curb free riding, at the end of the semester group members evaluate each other on a 10-point scale (the 10 points are part of the grading base). Anyone earning an average rating of 50% or less gets none of the group grade. Anyone earning more than 50% but not over 70% gets a proportionate group grade, while all others get the total points earned by the group. Charles Bonwell offers an alternative system of accountability using a check-plus, check, or check-minus system, with students having to justify their ratings (Bonwell, “Using Active Learning as Assessment in the Postsecondary Classroom,” 71 Clearing House 73 (1997)).

Each group selects a movie—either from the list provided by the professor or one of their own choosing—that they view outside class. In recent years, the author has not allowed deviation from the list in order to avoid having to watch the 19 casualty loss scenes from one previous group’s self-selection, Lethal Weapon IV. The movies included on the list are rich in tax issues: The Untouchables (tax evasion, illegal income); It Could Happen to You (lottery winnings, divorce issues, formation of business); Baby Boom (formation of business, business use of home, adoption); Indecent Proposal (classification of $1 million payment, charitable contribution, business expenses); Maverick (gambling income, theft losses, casualty losses); You’ve Got Mail (sale of business/assets, formation of business, divorce); and Pretty Woman (corporate takeover, trade or business expenses, gift/compensation). In recent semesters students have also selected Wall Street for more complex issues (illegal income, corporate takeovers, fraud, insider trading) and Soul Food for a wide variety of family-oriented issues (gifts, inheritance, trade or business, divorce, head of household).

The groups are instructed to view the movie and prepare a multisection report that includes the following (excerpted from the course syllabus):

• An introduction that describes the project, the content of the paper, and an overview of the movie.
• A comprehensive list of tax issues as they occur in the movie. (An abbreviated list of tax issues in It Could Happen to You is provided in Exhibit 1.)
• A narrative on the two main tax issues in which the group must:
  • Discuss any choices the taxpayer has concerning the issue. (For example, a single taxpayer with a dependent child for whom he or she is maintaining a home may file single or head of household, but head of household is more advantageous.)
  • Discuss requirements for the specific action to be taken. (For example, discuss the requirements of filing head of household, citing specific Code and regulation sections.)
  • Discuss the effect of the item on the Form 1040 and accompanying schedules. (For example, the filing status must be entered on the face of the Form 1040 and will affect the amount of the taxpayer’s standard deduction taken on page 2 of the form.)
  • Discuss any other related items needing explanation. Be sure to consider current tax law.
• A conclusion: What was learned from this project?

The final project is graded on three specific criteria: (1) the identification of relevant issues; (2) the technical coverage of the two issues identified (instructors may wish to concentrate on only one issue or expand to three or more issues); and (3) written communication skills, including presentation, organization, clarity, punctuation, and grammar. Students are given the grading rubric in advance. They have access to RIA and CCH research products and are directed to several award-winning websites to assist them, including Identifying Tax Issues, Locating Tax Authority, Evaluating Tax Authority, and M.Tx. Writing Website.

Excerpts from recent projects are included in Exhibit 2. As evidenced by the information in the exhibit, some groups go far beyond the material covered in class to find obscure tax law or review failed tax proposals.

Conclusion

The Movie Project bridges the gap between “reels” and real life. It accomplishes some of the key learning outcomes presented in the Model Tax Curriculum while facilitating students’ need for cooperative engagement. Various elements of the project acknowledge and serve different learning styles, whether students are the technically savvy, multitasking Generation Y, Gen Xers, or their predecessors. Further, the project allows instructors to explore a nonthreatening but rewarding form of active learning.

In general, student response to the project has been positive, with students commenting that “digging for tax issues” was fun and that they were able “to watch the movie from a different perspective and apply what we have learned from Acct 420 to the characters and their situations.” Although during the project students were less enthusiastic about the tax research element, later anecdotal feedback shows that they appreciated the opportunity to develop their research skills—skills that are much in demand in the workplace.

EditorNotes

Annette Nellen is a professor in the Department of Accounting and Finance at San Jose State University in San Jose, CA. Ellen Cook is assistant vice president for academic affairs and professor of accounting and Anita Hazelwood is professor of health information management at the University of Louisiana in Lafayette, LA. For more information about this column, contact Prof. Cook at edcook@louisiana.edu.