Experiences with the
Model Tax Curriculum
Authors:
Shirley Dennis-Escoffier, Ph.D., CPA
Professor, University of Miami, Coral Gables, FL
Anna C. Fowler, Ph.D., CPA
Professor, University of Texas-Austin, Austin, TX
John Phillips, Ph.D., CPA
Professor, University of Connecticut, Storrs, CT
Tad D. Ransopher, MTx, MPA, MBA, J.D.
Professor, Georgia State University, Atlanta, GA
Shelley Rhoades-Catanach, Ph.D., CPA
Professor, Villanova University, Philadelphia, PA
Editor's note: Shirley Dennis-Escoffier is a member of the AICPA's Pre-certification
Education Executive Committee.
Questions relating to the University of Texas-Austin program should be directed to
Anna C. Fowler at anna.fowler@bus.utexas.edu. Questions relating to the University of
Connecticut program should be directed to John Phillips at jphillips@sba.uconn.edu .
Questions relating to the Villanova University program should be directed to Shelley
Rhoades-Catanach at srhoades@po.villanova.edu. Questions relating to the Georgia
State University program should be directed to Tad D. Ransopher at
acctdr@langate.gsu.edu. Other questions can be directed to Shirley Dennis-Escoffier at
sdennis@miami.edu.
Traditionally, a college student's first tax course has stressed tax topics for individuals. The
basic concepts of income, business deductions and property transactions are taught within the
context of their effect on individuals. If students do not take a second tax course, they may be
unable to relate these broad concepts to other entities. Even when a student takes a second tax
course, the coverage of business taxation and tax planning may be insufficient to meet the
needs of today's employers. To address this problem, the AICPA developed the Model Tax
Curriculum (MTC), which places greater emphasis on business taxes and tax planning.
The breadth of topics encompassed in the MTC necessitates that teachers limit the depth of
coverage. Instructors who traditionally covered all the rules and exceptions must decide what
to eliminate to make room for the expansion of topics. Although the MTC suggests a specific
number of classroom hours for each topic, these are just guidelines. If an instructor needs
additional time (due to local requirements or students' needs), he can deviate from the time
specified in the MTC. The MTC can be found on the AICPA Website at
http://www.aicpa.org/members/ div/career/edu/introduc.htm.
Although many schools have already made the change to the MTC, faculty who have not yet
made the transition have asked for guidance on what has worked for those who have. In
response to this request, the experiences of four faculty who are now using the MTC
approach are examined: two for the first tax course and two for the second tax course.
Suggestions are then offered to those faculty who wish to start making a gradual transition
toward the MTC.
First Tax Course at the University of Texas
At the University of Texas at Austin (UT-A), students planning to become accounting
professionals usually enroll in one of two programs leading to a master in professional
accounting (MPA) degree. In the Professional Program in Accounting (PPA), students receive
their bachelors and masters degrees concurrently. They apply for this integrated program at
the end of their sophomore year and admission to the program is selective. The other program
(a stand-alone MPA) is designed for students who already have a bachelor's degree, but it
need not be in accounting. Within either program, students have the opportunity to
concentrate in one of several areas, including taxation.
The PPA requires that all students take an introductory tax course in their junior year. Over
half of the students take the course the first semester of their junior year when they are
enrolled in one other accounting course (either financial or managerial). All these students
have completed sophomore-level introductory financial accounting and managerial
accounting courses. The introductory tax course for PPAs has been a four-semester-credithour offering; beginning in fall 2001, it will become a three-hour course.
Students who are pursuing only a masters degree waive the introductory tax course (a threehour course especially for MPA students) if they have completed an undergraduate tax course
in the U.S. with a grade of B or higher. Thus, most students who enroll in this course are
either international students or nonaccounting majors.
The approach for the introductory course was changed in fall 1999, placing more emphasis on
business entities. The change was made because of a firm belief that, if students take only one
tax course (as is the case with many students who do not pursue the tax concentration), they
should have some basic understanding of the taxation of various business entities to enhance
their abilities to serve their clients or their corporate employers. Even with a four-hour course
(as has been the case for PPAs), all of the material from the MTC could not be included; a
judgment call about the most important topics for the students had to be made. Exhibit 1
shows a comparison of the content of the UT-A introductory tax course with that of the MTC
proposals for a one-semester introductory course.
A conscious decision was made not to cover tax research in the introductory course, leaving
that material for a graduate-level tax research course (required for students in the tax
concentration); a number of nontax students take this course as an elective. A portion of a
session, however, is spent discussing the various authorities to which one turns for answers to
tax questions and their relative hierarchy. As a result, the students can better understand
footnotes in the text that cite various authorities. Discussion of professional responsibilities is
integrated in various places in the course, including responses to students' questions.Although
full class periods are not devoted to accounting periods and methods, certain period and
method issues are discussed in connection with other topics. One example is installment sales,
which is covered with property transactions.
On the first class day, students are asked to complete and turn in a survey (a "consciousnessraising" activity). It serves as a "teaser" for issues discussed later in the semester. One of the
objectives is that students leave their first tax course as more informed citizens/residents on
tax issues and better "consumers" of information reported in the media; Exhibit 2 provides
some examples of the open-ended questions from the survey.
A group project to complete a corporate tax return includes providing the students with a trial
balance and other information; it places a major emphasis on book-tax differences, as does
one of the exam questions. For the project, the students are provided with a trial balance as
their starting point. This emphasis on book-tax differences is especially important for those
students who will not take an additional tax course.
Student comprehension is consistent with the experience prior to the MTC course revision. At
the same time, it is a challenge to cover the revised course material in the time allotted, and it
would be impracticable to cover all topics from the MTC in one semester. A move toward the
MTC better serves the students by providing them with more exposure to business entities
and helping them integrate tax with the rest of the accounting curriculum. This aspect of the
revision is especially important for students who take no additional tax courses.
First Tax Course at the University of Connecticut
Over 90% of the students in this course are accounting majors, most of whom are firstsemester juniors. Accordingly, the students have little financial accounting background, let
alone overall business knowledge. Most students participate in internships shortly after taking
the tax class, so preparation for their work experiences is an important objective. Most
students will enter the MS in Accounting graduate program, in which all students take an
entities-based tax course that covers the major issues in subchapters C and K (sub C/K).
When preparing to teach the undergraduate tax course for the first time in spring 1999, the
idea of following the MTC was appealing. Most appealing was the low emphasis on
individual-specific tax concepts and the focus on a book-tax differences approach to
understanding taxable income. The overall experience, however, was not a good one. The
students lacked interest in the course material, and there was not sufficient time to cover all
the suggested topics.
Objective #1. To introduce students to a broad range of tax concepts and types of taxpayers.
In attempting to accomplish this objective, initially too many technical details were
addressed. Also, the students were most interested in individual issues, which, unfortunately,
were not covered until late in the semester. To capture the students' attention, the course now
starts with individual tax concepts and then covers general tax principles in a variety of
settings, giving rigorous treatment to property acquisitions and dispositions. Sub C/K issues
are not covered. Further plans for change will be to increase only the focus on corporate
taxation (non-sub C issues) and introduce multijurisdictional tax concepts.
Objective #2. To emphasize the role of taxation in the business decision-making process.
First-semester juniors lacked the appropriate skill set (e.g., finance knowledge) to approach
the first tax course from a perspective that emphasizes tax planning concepts. Over time, the
course's focus on tax rules should be reduced and more decision-making applications
introduced. Doing so in a manner that complements (rather than substitutes for) the students'
minimum required knowledge of tax rules is the crucial hurdle to meeting this objective.
Objective #3. To provide students with the ability to conduct basic tax research and tax
planning. Students must complete a stand-alone tax research assignment using a tutorial that
helps them learn how to use an Internet-based tax research service. This tutorial uses
streaming video technology to walk the students through the tax research process. In this way,
it is not necessary to devote much class time to tax research. In addition, in the future,
students will complete this assignment earlier in the semester and research questions will be
introduced into compliance-based projects.
Objective #4. To expose students to professional standards and ethics. Although this topic is
a not a "syllabus" topic per se, numerous ethical issues are addressed as they arise in class.
Objective #5. To provide students with knowledge of the interrelationship and differences
between financial accounting and tax accounting. Given that the students are predominantly
first-semester juniors, this objective is the most difficult one to accomplish. Book-tax
differences are introduced, but not in a way that emphasizes such an approach to computing
taxable income. For example, students are given GAAP income statements to use in
completing a Schedule C in both individual tax return projects. Also, the students complete
Form 1120, Schedules M-1 and M-2 during an in-class exercise. Substituting a corporate tax
return for one of the individual tax return projects will further highlight the importance of
book-tax differences and better prepare the students for their internship experiences.
In summary, the results of implementing the model curriculum objectives were mixed, at
best. However, stimulating interest in tax is relatively more important than covering particular
tax topics, at least in the first tax course. Once this interest in tax issues is stimulated, the
students' future learning should subsume what they learn in the first tax class. Also, a positive
experience in the first tax class is crucial to motivating some students to pursue a career in tax
and helping others appreciate tax issues throughout their careers.
Second Tax Course at Villanova University
Villanova University has adopted the MTC in both introductory and advanced tax courses at
the undergraduate level. The discussion will focus on the use of the MTC in an advanced tax
course.
The advanced taxation course is an elective for senior accounting majors. Given the size of
the program, typical enrollment in this course ranges from five to 12 students. All enrollees
have completed a required introductory tax course.
The MTC proposes four main objectives for the advanced tax course:
1. To expand knowledge base as to choice of entity and special tax subjects.
2. To reinforce the importance of ethical considerations, competent tax research and
thoughtful tax planning.
3. To enable students to start with a trial balance and make necessary adjustments to arrive at
taxable income.
4. To enable students to prepare tax returns using tax preparation software.
Villanova's course adopts the first three objectives, with one exception: Ethics are not
emphasized to a great degree, as students take required ethics courses both in liberal arts and
in the business school. The fourth objective is not adopted in the advanced course, because
the introductory course includes a significant corporate tax return preparation project. The
advanced course places significant emphasis on planning and decision-making, while
incorporating tax research skills and knowledge of book-tax differences into the discussion of
advanced entities and wealth transfer topics.
Exhibit 3 presents the organization and content of topics included in Villanova's advanced tax
course. The course is organized into six parts. Part I, strategic tax planning, sets the focus of
the course and reviews planning tools introduced in the required introductory tax course. Part
II focuses on wealth transfer tax planning, including estate and gift taxation and the use of
trusts for transfer planning purposes. The remaining four parts address advanced business
taxation issues using an evolutionary framework. Part III considers tax issues associated with
start-up businesses. Part IV addresses tax implications of ongoing business operations. Part V
considers tax issues involving business growth and expansion. Part VI addresses changes in
business form and business terminations. The left column of Exhibit 3 identifies coverage of
topics proposed by the MTC. The right column of Exhibit 3 identifies additional topics
covered in the course, including additional detail on what is covered relative to the topics
specified in the MTC.
While the approach detailed in Exhibit 3 captures most of the advanced tax topics specified
by the MTC, there are several suggested topics omitted. Specifically, the course includes little
(or no) discussion of:
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History of the income tax and the legislative process.
S corporation eligibility requirements.
Individual alternative minimum tax (AMT).
Tax-exempt organizations.
Circular 230 and Statements on Standards for Tax Services (SSTSs).
The first two topics are covered in the introductory tax course and are not repeated in the
advanced course. While the introductory course also mentions the individual AMT, it is not
covered in detail. The advanced course restricts attention to the corporate AMT. Tax-exempt
organizations are not covered, primarily due to time constraints and because the focus is on
business tax issues. Finally, there is a need to creatively incorporate coverage of Circular 230
and the SSTSs, maybe involving an out-of-class research assignment that would explore
issues addressed in these statements.
Second Tax Course at Georgia State University
In 1999, the University System of the State of Georgia changed from the quarter to the
traditional semester system. At the same time, the State Board of Accountancy implemented
the 150-hour requirement for the minimum collegiate hours required to sit for the CPA
examination. As the Georgia State University School of Accountancy transitioned to the fiveyear program, the tax faculty reexamined the Tax I and II courses.
In the four-year program, Tax I and II were required of all accounting majors and were
offered at the undergraduate level. In the new five-year program, Tax II is now a graduatelevel course. This decision was made to better facilitate the MTC for Tax II. Additionally,
feedback from the profession and Georgia State's Board of Advisors made it clear that the
MTC was the direction of the future and, therefore, the tax faculty adopted that approach.
The course outline for a second semester of tax had as a prerequisite a three-hour Tax I
sequence at either Georgia State University or at the student's undergraduate institution.
Students taking the second three-semester hours of tax would already have an introduction to
the basic concepts of corporate and partnership taxation. This provides an opportunity to
further elaborate on the more complex issues of these business entities. In Tax II, a Socratic
teaching method is used, with court cases assigned, briefed and presented by the students to
integrate theory and practice. This teaching methodology enhances a student's ability to apply
principles and better recognize practice issues. With issue identification intertwined
throughout the course structure using the Socratic method, the student tendency to rely on
rule application is easily diverted.
Georgia State's Tax II course uses a traditional textbook, a casebook and a Website. The
Website, developed as part of a tax writing skills initiative, provides the student with writing
samples and instructions on briefing a tax case, writing tax file memoranda and client
correspondence. The site is located at http://www.gsu.edu/~accerl/ .
The Tax II course structure begins with tax research, tax writing and introduction to the tax
writing site. The course design ensures that the tax and nontax accounting professional has
exposure to tax research. Students are assigned cases from the casebook and are required to
brief the cases and make class presentations. In conjunction with these assignments, students
also are exposed to online research, as they follow the case brief examples on the tax writing
Website.
The course then covers the various types of business entities. Each entity is studied using a
"life cycle" approach. Case studies are assigned with the intent of further integrating the
theoretical and practical application of the principles. This enhances the student's ability to
recognize issues in a practice environment. With this approach, many practice issues are
bridged from one entity to another during certain phases of its life. This has been a successful
part of the course due to the cooperative learning process. The course concludes with the
topics of estate and gift, tax-exempt entities, fiduciary accounting, state and local taxes and
international taxation. Research and tax planning are again integrated throughout these
chapters as they apply to the specific topic.
An underlying focus, but a continuing theme throughout the course, is the difference between
financial and tax accounting. FAS 109 is discussed early in the semester to lay a foundation
for future lectures. Case development and discussions are periodically focused on
emphasizing the difference between financial and tax reporting.
The move to the MTC approach has been a success at Georgia State University. Students in
the program have better writing skills and improved issue identification and practice skills.
The course is fast-paced and designed as a survey-level course. Further, the sequence of tax
topics provides a base on which students can build their tax knowledge to pass professional
examinations and better prepare for their careers.
Suggestions for Making a Gradual Transition
For faculty unable to adopt the MTC in its entirety, there are a number of ways the basic
concepts of business taxation can be included within the curriculum using a traditional text
for the first course:
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Avoid the tendency to include all rules and exceptions, focusing more on concepts and
less on details.
When discussing the basic concepts of income, deductions and property transactions,
create examples for students using a corporation or partnership as the taxpayer (rather
than an individual).
When assigning problems, ask students to complete appropriate problems as if the
taxpayer were a corporation or a partnership.
m When discussing dividend income for individuals, introduce the corporate
dividends-received deduction.
Discuss the concept of a partnership as a passthrough entity when discussing income
and deduction items given special treatment for individuals.
Consider asking students to complete a basic Form 1120 or 1065 when they complete
a Schedule C for an individual return. Students can be referred to the IRS Website for
additional background material needed regarding these entities.
Assign cases or research problems involving tax planning.
To provide more class time for adding these topics, some things can be assigned for
self-study outside the classroom. Tax research is one such topic. This self-study
material can be provided to students via a course Webpage, instructor handouts or
materials placed on reserve in the library. Encouraging students to participate in a
voluntary income tax assistance (VITA) program is another way to move topics
outside the classroom.
Requiring students to learn some topics on their own can provide them with an introduction to
the real-world challenge of keeping up with current tax laws and learning on their own. This
should help better prepare students for their roles as business advisers and tax professionals.
Although adopting a new approach to teaching can be time-consuming, it can also reenergize
teaching skills and bring new excitement to the classroom for faculty as well as students.