Mikki Jag is a self-employed rock star who hires you as his new CPA to prepare his 2014 federal income tax returns, which are currently on extension. He explains that in 2014 he spent $10,000 on special “flashy” clothes and outfits for his rock concerts. Mikki would like to deduct the cost of these clothes as work-related because the clothes are not acceptable to his sense of fashion on a daily basis. He would like to know under what circumstances he can deduct the cost of these work clothes.
Please research the tax law and write Mikki a brief memo of no more than two pages, in which you communicate the results of your research. Use the format for communicating research findings discussed in the Learning Resources for Week 1: “Tax Research – Federal,” and “Locating Tax Authority,” as well as under “Syllabus and Course Schedule: Tax Research Assignment How to Complete” in the Course Content area of LEO.
Identify relevant statutory, administrative, and judicial authorities and discuss how these authorities affect your conclusion concerning the deductibility of Mikki Jag’s clothes.
*Remember: while IRS publications are useful as secondary sources, they are not primary sources that can be cited and relied upon in a tax research memorandum.
Your research assignment will be graded using the following criteria:
- Recognition of the important facts and issues
- Correct conclusion
- Clarity of writing
- Proper use of relevant sources to support your conclusion and analysis.
- Proper citation of relevant sources
- Proper format, spelling & grammar