Willy Wonka-Tax Affairs Case Study Solution
Overview
In 2012 Willy Wonka, opens a secret bank account at Never Land Bank, the bank is located outside the United States, and the main reason behind the opening of the bank is to hide the profit which Willy Wonka earns from its S-corp Golden Ticket Enterprises. To hide the profit Willy creates a consulting company in Florida named Oompa Loompa Marketing. Oompa Loompa sends monthly invoices of $10000 to S-corp Golden Ticket Enterprises.
Willy never file a tax return for 2012, however in 2014 he filed his 2013 tax return and in 2015 he filed his 2014 tax returns but both on these returns he deduct payments which he made to Oompa Loompa Marketing. In 2014 an order was issued to the Never Bank Land for the records of calendar year 2012 however this was revoked in 2016. In 2016 an Special Agent from Internal Revenue Service (IRS) was assigned at Willy Wonka to investigate either he has control over any bank account which is located over the United States and to investigate the unfiled tax return of 2012.
In the first question we describes the information which is required to complete our investigation after this we explain the personal from which I can obtained this information. However in second question I explain the possible charges which can be adhered over Willy Wonka and there pros and cons. After that I identify some facts which can be used by attorney to defense Willy Wonka. In the last question I discussed civil and criminal statute of limitations issues that exist for the IRS and for Willy along with this I also determine the criminal charges which could be filed against the Willy after that I mention the date till which IRS could assess additional taxes against Willy.
Willy Wonka-Tax Affairs Harvard Case Solution & Analysis
Answer #1
Willy Wonka case involves that of tax evasion. As a special agent attached with the IRS, I would like to have a number ofkey information in an order relating to this case.
Required information:
As a special agent of the Internal Revenue Service (IRS), I would like to gather the following information through the grand jury to investigate Willy Wonka’s tax affairs.
First of all, I will gather the information about the nature of the operations of both companies S-corp Golden Ticket Enterprises and Oompa Loompa Marketing. The rationale behind this information is that it will reveal the possible sources from where these both companies can earn income or incurred expenses. Hence this will help in assessing net income which is declared as the taxable income. Hence from this analysis I can ascertain that either in 2012 the company has taxable income which should be filed or not along with this it will also reveals the nature of transaction between two companies hence from this I can conclude that the services provided by Oompa Loompa Marketing is appropriate one or either it is for the purpose of the evasion of the tax.
The main problem in the case is that Willy Wonka hides its control over the foreign bank account Never Land Bank. Willy Wonka uses this account to deposit Oompa Loompa Marketing money which is received from the S-corp Golden Ticket Enterprises. To investigate the control over the banks I will obtain the list of banks from both of the companies along with this I will also obtain cash balances and a bank statement from both companies then reconcile their balances. The rationale behind this investigation is that it will reveal the Willy Wonka controls over the banks along with this it will also reveal the bank balance which should be taxed.
Along with this information, I will also obtain tax returns for both companies to ascertain which amount is reported as the taxable income.
Appropriate Witness for the interview:
Individuals to witness will include the CEO, accounts manager, customers and accountant of Willy’s companies along with this branch manager of Never Land Bank will also be considered to obtain the information about the bank accounts.
To obtain the information about the operations of the company I will interview the CEO and managers of the company because CEO betters know the objectives and goals of the company, therefore, information obtained from them will be vital in understanding the operations of the company the rationale behind obtaining information from the managers is that we can compare two sources information to enhance its validity. Along with this the information from the customers will reveals the position of cash which company earns from its customers.
To obtain information about control over the banks and bank balances I will interview the personnel who is responsible for the bank transactions along with this I will also obtain information from the bank managers. From this information, I can conclude that on which account the company has control and how much amount company has in its bank account............
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