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Tax Research And Representation

¶ … Alacare Home Health Services Inc., Petitioner vs. Commissioner of Internal Revenue The comparison of American Institute of CPAs' (AICPA) Statements on Tax Standards and the Treasury Department Circular 230 rules to practice.

Alacare Home Health Services, Inc., Petitioner vs. Commissioner of Internal Revenue Respondent

Facts:

In the addressed case, the petitioner was from Birmingham, Alabama, and was a Medicare-certified home health care agency which uses accrual method of accounting. As admitted by the respondent, the figure for office expenses in 1996 was overstated and should've been $247,413 and not $259,062 (Tax Attorney Resources - Alacare Home Health Services, Inc. - Page 7 - U.S. Tax Court Opinions, 2001). In 1995, the computer expenses amount had also been overstated due to an error in valuing depreciation and so, instead of $104,806, $101,806 had been recorded. A petition was formed in 1982 and from 1995-1996, the petitioner treated the cost of capital items less than $500 as an expense.

Issues:

It is crucial that a decision is made about whether the petitioner must continue to expense the capital items at less than $500 (Tax Attorney Resources - Alacare Home Health Services, Inc. - Page 7 - U.S. Tax Court Opinions, 2001). In order to decide, we must ensure...

We can come to know if the tax system is being controlled by the Federal tax system when business taxpayer's accounting method is standardised. However, in both cases, the Court of Claims concluded that a deduction could be made from the total expenses to settle differences if the accounting method selected by the ICC reflects income.
Conclusion / Recommendation:

The resultant judgement stated that since income wasn't reflected in the accounting method, the petitioner didn't hold the right to expense the cost of assets costing at less than $500 and having a useful life more than one year (ALACARE HOME HEALTH SERVICES, INC. v. COMMISSIONER -- Leagle.com, 2001). And thus, with reference to section 6662 (year 1995-96), it was to be concluded that the petitioner wouldn't be penalised for accuracy-related crime.

Comparison:

The AICPA Code has to be abided to…

Sources used in this document:
References

(2001). Laws - Legal Research. Tax Attorney Resources - Alacare Home Health Services, Inc. - Page 7 - U.S. Tax Court Opinions. Retrieved June 7, 2016, from http://law.onecle.com/tax/2001/alacare.tcm.wpd07.html

(2001). Leagle.com -- A leading provider of copies of primary case law from all Federal courts and all State higher courts. ALACARE HOME HEALTH SERVICES, INC. v. COMMISSIONER -- Leagle.com. Retrieved June 7, 2016, from http://www.leagle.com/decision/2001187581ertcm1794_11728/ALACARE%20HOME%20HEALTH%20SERVICES,%20INC.%20v.%20COMMISSIONER

Schreiber Jr. (2014). The Tax Adviser. An Overview of AICPA and IRS Rules of Practice. Retrieved June 7, 2016, from http://www.thetaxadviser.com/issues/2014/feb/tpr-feb2014.html
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