TAX 660: Final Exam
1. Salem Corporation uses the calendar year as its financial and tax annual accounting period. Management, because of the seasonality of sales, wants to change to a fiscal year beginning April 1st through March 31st. You have been asked to review the tax law criteria for making this change. Write a memo (750-1,000) to your CFO indicating the outcome of such a change on current taxes and outlining the requirements for making this change.
2. Salem realizes the importance of being a good corporate citizen and makes general contributions to worldwide charitable organizations. For 2009, Salem wants to contribute $1,500,000 to various charities. Based on 2008 tax laws, if Salem’s taxable income before charitable contributions is $11,500,000 in 2009, calculate the charitable contribution allowance for 2009. Provide a recommendation (500-750 word memo) to Salem management regarding tax implications of this contribution.
3. Corporate ethics and fraud have received much media attention through reporting of scandals at major corporations. Salem wants to make sure that its financial reporting and tax reporting responsibility is of the highest ethical standards. So that you understand the types of ethical misconducts that corporations are subject to and the penalties that can be given when uncovered, use the Internet to research and find the following:
Ethical standards for corporations
Recent changes to financial and reporting laws
Cases where corporations have committed unethical business practices and the resulting consequences
The final write-up should be approximately 750-1000 words. Make sure to mention the SOX act and perhaps the IMA ethical code of standards.