Show me the steps to solve:
You work for an accounting firm. The firm's partners interviewed current and potential clients. Relevant
facts from the interview meetings are below.
Your duty is to write a draft internal memorandum addressing the issues raised in the interview. Also
prepare a draft letter to the client based on your memo.
Your memorandum should be to pages; stating the essential facts, the issues, the conclusions. Also
include any provisions of the internal Revenue Code that support your suggested conclusion. You may
also include any other helpful administrative authority IRS regulations, IRS rulings, court decisions, etc.
that you find in your research.
Your client letter should be a onepage letter presenting your memorandum findings in a simple and clear
manner that is understandable to the client.
Pamela was an officer in Green Restaurant which subsequently went bankrupt. Pamela
started a new restaurant and, to establish goodwill, paid off the debts of $ of
Green Restaurant. She was under no obligation to do so
How is this payment handled for tax purposes?
