Note: The following syllabuses accompany the August 2014 Campus to Clients column, “The Model Tax Curriculum: 2014 Revisions Provide a Valuable Tool for Accounting Programs,” available here. The syllabuses provide potential ordering of topics in the course, and the hours provide suggestions for the extent of topical coverage. Instructor discretion may dictate different ordering of topics and hours devoted to the topics.
Both sample syllabuses start with an introduction to tax, discuss tax authorities, introduce tax research, and discuss basic principles of tax planning strategies. The sequencing of technical tax content for each syllabus is described below.
Syllabus A introduces basic principles in accounting for income taxes. It then covers gross income inclusions and exclusions; introduces tax years and tax accounting methods; and covers deductions and losses, tax consequences of property transactions, C corporation taxation, partnership taxation, and individual taxation (including discussion of fringe benefits and retirement plans). Syllabus A concludes with a discussion of professional responsibility in tax practice.
Syllabus B provides an overview of individual taxation and then covers gross income inclusions and exclusions, individual taxation, general business income taxation issues, and tax consequences of property transactions. Syllabus B then introduces business tax entities, covers C corporation taxation and partnership taxation, and concludes with S corporation taxation.
The primary differences between Syllabus A and Syllabus B are as follows:
- Syllabus A covers business entity taxation and then individual taxation. Syllabus B first covers individual taxation and then business entity taxation.
- Syllabus A begins the technical coverage with an overview of accounting for income taxes. Syllabus B does not provide for direct coverage of accounting for income taxes.
- Syllabus A discusses book-tax differences for entity taxation throughout the different technical modules. Syllabus B emphasizes book-tax differences in the C corporation taxation discussion.
- Syllabus A provides for a class session of discussion solely for professional responsibilities in tax practice while Syllabus B incorporates this discussion into the tax research and tax authority discussion.
In terms of technical coverage, Syllabus A and Syllabus B compare as follows:
- Both Syllabus A and Syllabus B provide for 7.5 contact hours (375 minutes) relating specifically to individual taxation.
- Both Syllabus A and Syllabus B provide for 13.5 contact hours (675 minutes) on tax issues relevant to both individual taxpayers and business entities.
- Syllabus A provides for 10.5 contact hours (525 minutes) covering tax issues specific to business entities. Syllabus B provides for 13.5 contact hours (675 minutes) covering tax issues specific to business entities.
- Both Syllabus A and Syllabus B provide for two 1.5 hour (75 minutes) exams.
SAMPLE SYLLABUS A
LEARNING OUTCOMES:
- Demonstrate knowledge of the components of the basic income tax formula for individuals and business entities, understand when income and deductions are recognized, and describe when they are excluded (or disallowed) or deferred.
- Explain the interrelationships and differences between financial accounting and tax accounting.
- Apply analytical reasoning tools to assess how taxes affect economic decisions for individuals and business entities.
- Demonstrate the ability to conduct tax research.
- Understand tax-related professional and ethical obligations and identify tax-based community service opportunities.
- Explain basic tax policy considerations underlying common tax regimes.
I. INTRODUCTION (75 minutes)
- Policy
considerations:
- Political process
- Economic and social policy implications
- Criteria for a good tax
- Interrelationship between local, state, federal, and foreign taxing jurisdictions
- Types of taxpayers
- Tax formula
- Other types of tax systems
II. INTRODUCTION TO TAX RESEARCH (75 minutes plus coverage integrated throughout other topics)
- Sources of authority
- Tax research process
III. INTRODUCTION TO TAX PLANNING (75 minutes plus coverage integrated throughout other topics)
- Basic principles of tax planning
- Basic applications of tax planning
IV. INTRODUCTION TO ACCOUNTING FOR INCOME TAXES (75 minutes plus coverage integrated throughout other topics)
- Basic principles under ASC 740
- Steps in calculating income tax provision
V. GROSS INCOME (225 minutes)
- Taxable year
- Methods of accounting, cash vs. accrual
- Includible/excludable items
- Identify book-tax differences as permanent or temporary
VI. DEDUCTIONS AND LOSSES (225 minutes)
- Deductible vs. nondeductible
- Timing of expense recognition
- Business vs. personal
- Losses and loss limitations
- Depreciation and amortization
- Identify book-tax differences as permanent or temporary
VII. FIRST MIDTERM EXAM (75 minutes)
VIII. PROPERTY TRANSACTION (225 minutes)
- Amount realized and recognized
- Basis
- Capital gains, Section 1231, and recapture
- Nontaxable sales and exchanges
- Identify book-tax differences as permanent or temporary
IX. C CORPORATIONS (225 minutes)
- Pros/cons of incorporation
- Transfers to corporations
- Computing corporate taxable income
- Alternative minimum tax
- Reconciling book income to taxable income
- Completion of Schedule M-1
X. PARTNERSHIPS (150 minutes)
- Overview of partnership taxation
- Forming a partnership
- Reporting operating results
- Basis and loss limitations
- Transactions with partners
XI. SECOND MIDTERM EXAM
XII. S CORPORATIONS (150 minutes)
- Eligible corporations and S election
- Reporting operating results
- Basis limitations
- Choice of business entity
XIII. INDIVIDUAL (300 minutes)
- Sole proprietorships
- Dependents and exemptions
- Filing status
- Deductions for and from AGI
- Individual tax credits
- Alternative minimum tax
XIV. FRINGE BENEFITS & RETIREMENT PLANS (75 minutes)
- Qualified fringe benefits
- Types of retirement plans
XV. PROFESSIONAL RESPONSIBILITIES IN TAX PRACTICE (75 minutes)
- Statements on Standards for Tax Services (SSTSs)
- Key elements of Circular 230
- Volunteer opportunities for tax professionals
XVI. FINAL EXAM
Total 2,100 contact minutes = 42 contact hours (50 minutes per contact hour)
SAMPLE SYLLABUS B
LEARNING OUTCOMES:
- Demonstrate knowledge of the components of the basic income tax formula for individuals and business entities, understand when income and deductions are recognized, and describe when they are excluded (or disallowed) or deferred.
- Explain the interrelationships and differences between financial accounting and tax accounting.
- Apply analytical reasoning tools to assess how taxes affect economic decisions for individuals and business entities.
- Demonstrate the ability to conduct tax research.
- Understand tax-related professional and ethical obligations and identify tax-based community service opportunities.
- Explain basic tax policy considerations underlying common tax regimes.
I. INTRODUCTION (75 minutes)
- Who cares about taxes and why?
- What qualifies as a tax?
- How to calculate a tax
- Ways to measure tax rates
- Tax rate structures
- Types of taxes
- Evaluating
alternative tax
systems
- Sufficiency, equity, certainty, convenience, economy
II. TAX COMPLIANCE, THE IRS, AND TAX AUTHORITIES AND INTRODUCTION TO TAX RESEARCH (75 minutes)
- Taxpayer filing
requirements
- Due dates, extensions, statutes of limitation
- IRS audits
- Tax law sources
- Tax research
- Tax professional responsibilities
- Taxpayer and tax practitioner penalties
III. TAX PLANNING STRATEGIES AND RELATED LIMITATIONS (75 minutes)
- Tax planning overview
- Timing strategies
- Income-shifting strategies
- Conversion strategies
- Limitations to tax planning strategies
- Tax avoidance vs. tax evasion
IV. INDIVIDUAL INCOME TAX OVERVIEW, EXEMPTIONS, AND FILING STATUS (75 minutes)
- Individual income tax formula
- Personal and dependency exemptions
- Filing status
V. GROSS INCOME AND EXCLUSIONS (150 minutes)
- Realization and
recognition of income
- What is included in gross income?
- Income concepts
- Timing of income recognition
- Types of income
- Exclusion and deferral provisions
VI. INDIVIDUAL FOR AGI DEDUCTIONS (75 minutes)
- Overview
- Deductions
directly related to
business activities
- Trade or business expense
- Rental and royalty expenses
- Losses
- Flowthrough entities
- Loss limitation rules
- Tax basis, at risk, and passive loss
- Rental use of home
- Deductions
indirectly related to
business activities
- Traditional and Roth IRAs
- Moving expenses
- Health insurance for self-employed
- Deductions
subsidizing specific
activities
- Interest on qualified education loans
- Deduction for qualified education expenses
VII. INDIVIDUAL FROM AGI DEDUCTIONS (75 minutes)
- Itemized
deductions
- Phaseout of itemized deductions
- Standard deduction
- Personal and dependency exemptions
- Phaseout of personal and dependency exemptions
VIII. INDIVIDUAL INCOME TAX COMPUTATION AND TAX CREDITS (150 minutes)
- Regular federal income tax computation
- Alternative minimum tax
- Employment and self-employment taxes
- Tax credits
IX. FIRST MIDTERM EXAM (75 minutes)
X. BUSINESS INCOME, DEDUCTIONS, AND ACCOUNTING METHODS (225 minutes)
- Business gross income
- Business deductions
- Limitations on business deductions
- Specific business deductions
- Accounting methods
- Comparison of accrual and cash methods
- Changes in accounting methods
XI. PROPERTY ACQUISITION AND COST RECOVERY (150 minutes)
- Depreciation
- Personal property
- Real property
- Special
rules
- Immediate expensing
- Bonus depreciation
- Luxury automobiles
- Amortization
- Depletion
XII. PROPERTY DISPOSITIONS (150 minutes)
- Realized and recognized gain or loss
- Character of gain or loss
- Depreciation recapture
- Deferral transactions
XIII. ENTITIES OVERVIEW (75 minutes)
- Legal classification
- Nontax characteristics
- Entity tax classification
- Entity tax characteristics
XIV. SECOND MIDTERM EXAM (75 minutes)
XV. CORPORATE FORMATIONS AND OPERATIONS (225 minutes)
- Transfers of property to a corporation
- Corporate taxable income
- Book-tax
differences
- Common permanent book-tax differences
- Common temporary book-tax differences
- Corporate specific deductions
- Compliance
- Corporate alternative minimum tax
XVI. CORPORATE NONLIQUIDATING DISTRIBUTIONS (75 minutes)
- Computing earnings and profits
- Ordering of E&P distributions
- Distributions of noncash property
- Constructive dividends
XVII. FORMING AND OPERATING A PARTNERSHIP (150 minutes)
- Flowthrough overview
- Acquiring partnership interests
- Accounting periods, methods, and tax elections
- Reporting partnership operations
- Distributions
- Loss limitations
XVIII. S CORPORATIONS (150 minutes)
- Formation
- Termination
- Operating issues
- Loss limitations
- Distributions
- Liquidating distributions
- Comparison of C and S corporations and partnerships
XIX. FINAL EXAM
Total 2,100 contact minutes = 42 contact hours (50 minutes per contact hour)
EXAMPLE PROJECTS
Below are descriptions of several course projects intended to supplement in-class topical coverage in meeting the MTC learning objectives.
Tax Research and Writing Project
A typical tax research and writing project could be structured as a research case study. The assignment would expose students to complex tax issues for which clear-cut solutions are not obvious. The case provides students the opportunity to identify and analyze tax issues, search for relevant legal authorities, and relate the results of their research and analysis in concise written communication. The project submission could be presented in a brief paper written in the form of a file memorandum. Thus the students would adopt the role of tax professionals advising a client.
This project is targeted at the tax research objective of the MTC. However, it can be tailored to any technical topic for which the instructor desires additional coverage. It can also be structured around a proposed transaction to incorporate tax planning aspects.
VITA Service Project
Where available, participation in the Volunteer Income Tax Assistance (VITA) program could be incorporated into an introductory tax course as a required or optional project. VITA requires technical training on specific individual tax topics, a certification exam, and participation in tax return preparation at VITA sites during tax season.
This project addresses the professional responsibilities and community-based service opportunity object of the MTC. It also encompasses a variety of individual-focused technical topics, the individual income tax formula, and tax credits.
Tax Planning Case
A tax planning project could ask students to analyze alternative structures for a proposed transaction and make a recommendation for the optimal structure meeting the taxpayer’s tax and nontax objectives. Results of the analysis could be submitted as a written paper and/or communicated via an individual or team-based oral presentation.
This project requires students to apply analytical reasoning tools to assess how taxes affect economic decisions, a primary learning objective of the MTC. It can be tailored to any technical topic for which the instructor desires additional coverage.
Tax Return Project
This project requires students to calculate taxable income and tax liability for a realistic taxpayer fact situation and complete IRS forms required to file the taxpayer’s federal income tax return. The project could be an individual and/or corporate tax return problem.
A corporate tax return project would challenge students to identify book-tax differences in order to complete Schedule M-1 of Form 1120. Further, it would provide students with an opportunity to comprehensively address a variety of business technical topics as well as interrelationships and differences between financial accounting and tax accounting.
An individual tax return project would allow students to review the many individual tax rules they learned during the semester. It would also help students understand the manner in which this information flows through a tax return.
