Reducing Annual Tax Liability (Accounting, Finance, SPSS Research Paper)

Overview:
The purpose of this assignment is to provide you with hands-on experience performing basic tax research using the resources available to you. You will use these same tools later in the semester when your group prepares a Research Presentation. This assignment also requires you to practice preparing a formal tax memo using the format presented in Chapter 2 of our textbook and to communicate your findings and recommendations to your client through email.
Instructions:
Review the Client Facts provided below and use the listed resources to formulate a recommendation for your client. Once you understand the facts and identify the issues which need to be addressed, use the electronic tax research databases available through the library to locate relevant authorities. After analyzing these authorities, document and communicate the results by preparing:
a double-spaced, single page memo to be reviewed by the firm partner - Alma Mater; and
an email(less than one page) to the client - Michael Wayne.
Submit your memo and email as a single .docx file.
Client Facts:
Your client, Michael Wayne, has been seeking to reduce his annual tax liability. He owns and manages several businesses including a large RV park located in the tiny desert town of Quartzsite, Arizona. This town's resident population is less than 4,000, but in the winter months the community swells to more than a million people as senior citizens from colder climates travel in their RVs to enjoy warm weather, swap meets, gem and mineral shows and the companionship of fellow RVers. Mr. Wayne rents RV spots to winter visitors for periods of three months or more. For their payment they receive a reserved parking spot with water and electric hookups. They also receive access to the park's clubhouse which regularly hosts activities such as live music and dancing. In a recent email, Michael informed you that he is considering offering a small discount to customers who pay in cash. He believes this discount will increase the percentage of cash payments and suggests that the revenues lost by offering the discount will be more than offset by the tax savings he will realize by not reporting the income from these cash transactions on his tax return. Michael is hoping you can provide him with guidance on what the expected costs and benefits of implementing this strategy will be and to assist him in determining an appropriate discount percentage.
Resources:
Electronic Tax Research Databases: https://www(dot)library(dot)illinois(dot)edu/bis/resources-for-faculty-phd/
Watch Tax Research Video
The Tax Research section of Chapter 2 in the textbook (especially the following exhibits):
Exhibit 2-5 Citations to Common Primary Authorities
Exhibit 2-9 Sample Internal Research Memo
Exhibit 2-10 Sample Client Letter
Criteria:
Your memo and email will be evaluated on the following dimensions:
Accuracy of assertions
Justification of assertions
Memo organization
Email organization
Grammar and mechanics
Professional style
Points
You should review the rubric prior to preparing your deliverables.