To: Bryce Jones
From: Peterson James, Tax officer at Michigan.
Date: 15/10/2019
Subject: Pay Taxes for Advertising Your Business
It has come to our attention that you are advertising your business through a prominent signage ad on your race car. This is against tax compliance laws. In this case, I will consider an alternative strategy that will safeguard your accounting and tax return preparation business. In the United States, taxes are to be paid for advertising space as an expense on the taxpayer’s side. This memo provides my understanding of your situation, proposes several strategies to address it, and my recommendation on how to solve the issue.
You have not been paying for advertisement space since you have an advert on your race car that communicates about your business to the public. According to Internal Revenue Code § 183, taxes are to be paid for every activity that generates income or profits (IRC, n.d). Thus, tax expenses are supposed to be deducted for an advertisement since it is a for-profit venture by you as a taxpayer in the United States. Besides, Internal Revenue Code § 183 adds that the content of an advert is examined to determine this (IRC, n.d). In your case, the signage advertisement on your car is a written message dedicated to promoting your business. You may argue that your business is based in a home environment where a court case concerning Curphey v. Commissioner in 1980 confirms that payment of taxes is not applicable. However, advertisement in the public domain is not covered by § 280A(c)(1)(A) concerning businesses operated in resident areas (IRC, n.ab). Your wife and children issue flyers with information concerning your business. Besides, you always post a picture with your car in the local paper. This is a clear indication that you deliberately intend to communicate to the public about your business, which is a for-profit activity. Thus, Revenue Code § 183 concerning taxes on advertisements cancels such a notion.
Delegate your assignment to our experts and they will do the rest.
In this case, you are required to present your car for the advert to keenly examined, as provided by Revenue Code § 183. Professional judgment will be applied to ascertain, whether it genuinely advertises your accounting and tax return preparation business to the public (IRC, n.aa). Besides, a copy of the flyer should be presented to us for examination. Then also, you can choose to remove the advert from your car and submit it for checking. You can also destroy the flyers and stick to the law. This will ensure that your operations are within the provisions of Revenue Code § 183 concerning advertisements.
In my view, getting rid of the advert will not help in the development of your business. It will lower your sales and overall profits, hence; you will not achieve your business goals. Information about your private business will not reach many prospective clients that are in dire need of your services. I would recommend presenting the car and the flyer for examination as the best and most crucial step that you can take. Although it will increase your expenditure on the car, it will allow you to enhance your advertisements, a move that will significantly increase your sales and overall profits. Notably, you will operate smoothly without being interfered with tax authorities.
If you need more details concerning the topic, it will be my pleasure to assist you in understanding it better. Following the provision by Revenue Code § 183 and taxing, your advert will not only benefit you. You will be among many whose contributions as taxpayers have enabled the government to run projects that are essential to humanity. I look upon you to respond positively and adhere to the provisions by Revenue Code § 183.
A Letter to the Client
Peterson James
PO Box 00100, New York City
15/10/2019
Bryce Jones
PO Box 00010, Midwest
15/10/2019
Dear Mr. Bryce Jones
This is an explanation of my analysis and recommendations concerning the issue of tax payments for the advertisement of your business. I will be doing as a professional in matters taxes and as the chief tax officer. Provisions, according to Revenue Code § 183, confirmed that you have not been paying for advertisement space.
In the United States of America, payment for advertisement space is mandatory for any for-profit venture. Besides, a keen analysis is to be contacted and professional judgment applied to determine whether advertisement space is being used appropriately or not. It is common knowledge that business is meant for profit-making. In this case, your accounting and tax return preparation business is intended to generate profits for you. Based on this and applying Revenue Code § 183 determines that you are probably against the law concerning tax payments. Although a determination by the court in Curphey v. Commissioner Case in 1980 decided that taxes are liable if the workplace is his one's residence, advertisement space in the public domain is supposed to be paid (IRC, n.ab). Hence, you are supposed to pay for the advertisement space.
Removing the advert from your car and getting rid of flyers will adversely impact your business. This could be an option, but it is not a good one since it will undermine the profitability of your business. However, the second recommendation is wholly adequate for both your business and the government. I find this recommendation ideal since you will have the freedom to advertise and advance your business. The business will have the potential to generate more revenue than the amount that would be incurred by paying for taxes.
I look forward to your cooperation as you adjust yourself under the law.
Yours sincerely
Peterson James
References
IRC. (n.a)a. IRC § 183: Activities Not Engaged in For Profit (ATG). Retrieved from https://www.irs.gov/pub/irs-utl/irc183activitiesnotengagedinforprofit.pdf
IRC. (n.a)b. Section 162.--Trade or Business Expense. Retrieved from https://www.irs.gov/pub/irs-drop/rr-99-7.pdf
