Adjunct Professor Mark Hoose
Phone: (626) 319-0714
Email: mshoose1@gmail.com
Office Hours:
By appointment only
Class Meetings:
Mondays January 25 to April 25, 7:30 to
9:30 p.m.
Course Materials and Additional Resources
The reading and reference materials for this course are listed in the attached syllabus. Please note that some items are marked as required reading while other items are denoted as optional reading material. An optional, additional resource is the WG&L treatise Federal Tax Accounting by Stephen F. Gertzman.
Course Objectives . At the end of this course, students should be able to demonstrate their mastery of the following learning objectives:

Understand and apply statutory provisions of the Internal Revenue Code regarding tax accounting and the policies underlying them;

Understand the various methods of accounting;

Understand special rules related to accounting, such as capitalization;

Understand special methods of accounting for items such as inventory; and

Understand the rules for making a change of accounting method.
Class Attendance Policy . Consistent with university policy, a minimum of 80 percent attendance is required for each student. An attendance list will be circulated at each class session. Those individuals not satisfying the attendance requirement will be reported to UH Law Center administrative officials for appropriate action.
Class Preparation and Participation: This course requires regular preparation and participation. Each class will be a mixed format of a lecture covering fundamental principles as well as a (hopefully interactive) discussion based on various fact patterns of the topics outlined in the syllabus. Please be considerate of your fellow students
– eating, cell phone usage, internet surfing and other bothersome behaviors should be avoided during class.
Grading Policies: The final exam is the only exam given for the course.
You may use your copy of the Internal Revenue Code, including any hand-written annotations, and any outlines or notes, but may not consult any other person. A take-home exam
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was administered in prior semesters, and subject to further class discussion, this format is anticipated to be the examination technique for the Spring Semester 2016 class.
TENTATIVE ASSIGNMENTS (SUBJECT TO CHANGE)
I.
II.
Introduction and Overview
Methods of Accounting
A.
B.
C.
Definition of
“Method of Accounting”
Requirements governing methods of accounting
Discretion in choosing methods of accounting
Required Reading
IRC §446, §448
Treas. Reg. §1.446-1
Hallmark Cards, Inc. v. Commissioner, 90 T.C. 26 (1988). (skim)
III.
Cash Method
A.
B.
C.
D.
E.
F.
General principles of inclusion
Constructive receipt
Cash equivalency
Economic benefit
Eligibility for the cash method
General principles of deduction
Required Reading
IRC §448, §451(a)
Treas. Reg. §1.451-1(a), §1.451-2
Treas. Reg. §1.448-1 (skim ), §1.448-1T (skim)
IV.
Accrual Method - Income Recognition
A.
B.
Introduction
Is it income?
Required Reading
IRC §61
Treas. Reg. §1.61 (skim)
Commissioner v. Indianapolis Power and Light Co., 493 U.S. 203 (1990)
North American Oil Consolidated v. Burnet , 286 U.S. 417 (1932)
C.
General principles of inclusion
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Required Reading
IRC §451(a), §448(d)(5)
Treas. Reg. §1.451-1(a)
Rev. Rul. 74-607, 1974-2 C.B. 149
Hallmark Cards, Inc. v. Commissioner, 90 T.C. 26 (1988).
Rameau A. Johnson, et al. v. Commissioner, 184 F.3d 786 (8 th Cir. 1999). (skim)
North American Oil Consolidated v. Burnet , 286 U.S. 417 (1932) ( skim )
V.
D.
Advance payments
Required Reading
IRC §451(a), §448(d)(5)
Treas. Reg. §1.451-1(a), §1.451-5
Schlude v. Commissioner , 372 U.S. 128 (1963) (skim)
Artnell v. Commissioner , 400 F.2d 981 (7th Cir. 1968) (skim)
Accrual Method - Deductions
A.
B.
C.
D.
General principles of deduction
The all-events test
Economic performance
Exceptions
Required Reading
IRC §461(a), (h) and (f)
Treas. Reg. §1.446-1, §1.461-1, §1.461-4 and
§1.461-5 Rev. Rul. 2007-3
United States v. General Dynamics Corp ., 481 U.S. 239 (1987) ( skim)
VI.
VII.
Special Rules Relating to Deductions
A.
B.
C.
D.
Capital expense v. ordinary expense
Capitalization of tangible property
Capitalization of intangible property
Miscellaneous deduction principles
Required Reading
IRC §263(a); §263A(a) – (c), (g); skim §195
Treas. Reg. §1.162-4; §1.263(a)-1; skim §1.263(a)-2 and -3; skim §1.263A-1 Treas. Reg. §1.263(a)-4 and -5 (skim)
Specialized Methods of Accounting & Certain Elective Treatments
A.
Depreciation and amortization
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D.
E.
F.
Required Reading
IRC §167, §168, §197
Treas. Reg. §1.167(a)-1 through -10 (skim)
Rev. Proc. 87-56 ( skim)
Whiteco Industries Inc. v. Commissioner, 65 T.C. 664 (1975) (skim)
B.
C.
D.
Treatment of long-term contracts
Installment method
Certain costs with optional capitalization
Required Reading
IRC §460
IRC §453 (except (h)); skim §453A, skim
§453B(a) and (b) IRC §195
IRC §174
VIII.
Inventories
A.
B.
C.
General principles
Inventory costing
Write-down of ending inventory
Required Reading
IRC §471
Treas. Reg. §1.61-3(a), skim §1.471-1 through -4
Dollar-value LIFO
Pooling
Conformity
Required Reading
IRC §472
Treas. Reg. §1.472-1 through -8 (skim)
IX.
Change of Accounting Method and Accounting Periods
A.
Change of Accounting Method a.
b.
Definition
Correction of error distinguished c.
Procedures for change d.
Section 481 adjustment
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B.
Required Reading
IRC §446(e), §481(a) and (c)
Treas. Reg. §1.446-1(e),
§1.481-1
Rev. Proc. 97-27, 1997-1 C.B. 680 (skim)
Rev. Proc. 2011-14, 2011-1 C.B. 330 (skim)
Accounting Periods a.
b.
c.
d.
General rules for taxable years
Required taxable years for certain entities
Election of taxable year other than required taxable year
Adoption and change of taxable year e.
Short period returns
Required Reading
IRC §441 (except (h)), §442, §443, §706(b), §1378 (skim)
Treas. Reg. §1.441-1, §1.442-1(a) through (c), §1.706-1, §1.1378-1 (skim)
X.
IRS Focus on Accounting Methods Issues
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