Research Project 1 Prompt
You have a client named Takems Appliances and
Electronics, LLC, owned and operated by Tommy Takem. Takems is located in a
rural area of Southwest Virginia, and the majority of its customers are poorer
residents of the Appalachian regions of Virginia, Tennessee, Kentucky, and West
Virginia. Since his business is located in a rural area where there is little
competition, Tommy tends to charge about 1020% more than most other retail
outlets.
Tommy recently came up with an idea for expanding his
business. He decided to begin selling his appliances and electronics
door-to-door in the above described regions. Until recently, it had been
working great. He hired some great salespeople who really know how to apply
the pressure and turn up the heat. Further, since he is providing a service to
these folks by bringing the goods to their homes, he charges about 30% more
than he would if the customers came to the store. Obviously, the salespeople do
not mention this fact to the customers.
Further, since many of the customers are poor, relatively
uneducated and unsophisticated, and have poor credit, the vast majority of the
sales are financed by Takems. The salespeople get the customers to sign a bill
of sale, a security agreement, and a negotiable promissory note. When these
documents are processed back at the office, the clerk then files a financing
statement covering the goods sold to the customer in the appropriate state
office. For this, Takems charges a 15% application fee and the maximum rate of
interest allowed by law. The default rate is high, but through a combination of
collections, repossessions, fees and charges, higher prices, and markups, etc.,
Takems is doing very well.
Recently, Tommy received a letter from a disgruntled
customer named Sally Walker (an elderly widow lady who lives alone in the hills
of Southwest Virginiaher children and grandchildren have all moved out of the
area.) She has fallen behind on her payments on her new laptop computer, and
Tommy had started collection efforts. He had not yet referred it to a lawyer.
The letter is very well written (which would be unexpected since Sally is not
very well educated.) It indicates that her granddaughter, who recently
graduated with an MS in Accounting from Liberty University Online helped her
with it. It argues that the entire deal is unconscionable and therefore
unenforceable. Further, it asserts that Sally has paid enough for the computer
and will not be paying any more. Finally, it threatens to sue for punitive
damages and write letters to the editors of various local papers throughout the
region if Takems pushes the matter further.
Tommy is very upset. He wants to know whether the argument
in the letter has any merit. Should he take the threats
in the letter seriously or should he just proceed with collections? In other
words, is his business model legal? Further, he wants to know what he could do
to protect himself in the future. Would setting up a financing company that he
also owns and selling the notes to the financing company such that the
financing company becomes a holder in due course help? Finally, he wants to
know what you think about his business modelregardless of whether you conclude
that it is legal, is it moral/ethical?.0001pt;
text-align:center;line-height:150%”>Research Project 2 PromptFor this
research project, you will consider a very practical question. While it
mayinitially seem unrelated to the Christian worldview, as you study it, you
will see that it has deep implications for the Christian businessperson and the
Kingdom of God. The issue is: which form of business organization is best for
a client in a given situation and how should that entity be taxed? As noted, at first blush, this very practical question
may seem to have very little to do with the Christian worldview. That
conclusion, however, would be in error. The Bible is a very practical book and
it is concerned with every facet of our lives. There is no part of the universe
over which Jesus is not Lord (See, e.g.,
Matthew 28:18). Accordingly, there is no part of our lives with which He is
not concerned. Further, we as Christians should be good stewards of what
God has given us, and we should be about the business of being fruitful and
multiplying and taking dominion over the Earth (See, e.g., Genesis 1:2831, 9:1 and 7). A primary means for
accomplishing these goals is through just commercial activity conducted through
business enterprises. Consider this: the Pilgrims and Puritans who settled what
is now Massachusetts did so via the business organization known as a Joint
Stock Company. Business enterprises have developed cures for various diseases.
They have built skyscrapers that tower over the landscape like mountains and
dug vast tunnels under the sea beds. Businesses have been essential in
accomplishing this amazing level of dominion over the earth and helping us to
be fruitful and multiply and fill the earth just as God commanded. Therefore, choosing the right business organization form
and tax regime for a new business is very much a God-honoring endeavor. With
that said, now consider the following fact pattern for this research project:Alex, Bill,
Carl, and Devon inherit from their Dad an operating organic farm in New State.
The farm includes an orchard, various vegetable garden tracts, fields usually
planted in grains, several trout ponds, and a poultry operation. In addition to
selling the various organic products, the farm usually invites the public in
each year during the fall for a corn maze, pumpkin patch, and other amusements.
Alex, Bill, Carl, and Devon were never interested in farming, so their cousin,
Xavier, was trained to run the farming operation by Dad and has been helping
Dad do so for the past 5 years. Xavier wants to continue to do that, and Alex,
Bill, Carl, and Devon are willing for him to continue to do that. Therefore,
they want to form a business entity to own the farm, which Dad ran as a sole
proprietorship. Obviously, they dont want a lot of formalities or complexities
to fool with since they want Xavier to handle the day-to-day operations of
the farm. Further, they want to minimize their taxes on the entity, they want
to avoid any personal liability from the farming operations, and they want to
keep the business in the family (it might be fine to sell interests in the
business to their kids or to Xavier, but they would not want a stranger owning
part of the business).They have
discussed the deal with Xavier, and he is very excited. In fact, he proposes
that the business borrow an additional $500,000 and expand its operations to
include a vineyard. There is a bank willing to offer financing, but Alex, Bill,
Carl, and Devon would have to be willing to sign personal guarantees. They are
still thinking it over, but they probably will proceed with Xaviers plan for
expansion.They want you to
be their accountant in New State, and therefore they come to you for advice as
to which would be the best form of business organization to use for operating of
the farm.Alex, Bill,
Carl, Devon, and Xavier are all Christians and want their business to be
organized and operated in accordance with the Christian worldview.In view of their
situation described above, which form of business organization would you recommend?
Explain fully, including the strengths and weaknesses of each form of business
organization and be sure to make application to the specific facts of this
situation. Assume for the purposes of this assignment that New State has
typical statutes governing business organizations and that New States taxation
of business organizations follows the federal regime.Suggest Helpful
Resources:
For an excellent
article discussing the relative advantages and disadvantages of s-corporation
taxation and partnership taxation, see
Walter D. Schwidetzky, Integrating
Subchapters K and SJust Do It, 62 Tax Law. 749 (2009).For
an excellent discussion of one of the primary benefits of s-corporation
taxation for many closely held businesses, the minimization of employment
taxes, see Timothy M. Todd, Multiple-Entity Planning to Reduce
Self-Employment Taxes: Recent Cases Demonstrate the Pitfalls and How to Avoid
Them, 13 Journal of Tax Practice & Procedure 31 (April/May 2011)..0001pt; line-height: 150%;”>Research Project InstructionsIn this course,
you will be required to write 2Research Project papers. These papers will
require you to research and address realistic, hypothetical legal scenarios.
Each of these papers must be 710 pages in length (not including the title
page, abstract, and bibliography), in current APA format, with 1-inch margins,
double-spaced, and in 12-point Times New Roman font. Each paper must include
citations to adequate sources supporting and/or illustrating your positions.
Each paper must include a title page, abstract, and bibliography in current APA
format. Please see the grading rubric for additional information.These papers are
exercises in the application of the material covered in the course to realistic,
legal scenarios. You will be provided a prompt for each research project, and
your paper should thoroughly answer the questions presented in that prompt.Research Project
1 is due by 11:59 p.m. (ET) on Sunday of Module/Week 4.
Research Project
2 is due by 11:59 p.m. (ET) on Friday
of Module/Week 8.
Research Project 1 Prompt You have a client named Takems Appliances and
Electronics, LLC, owned and operated by Tommy Takem. Takems is located in a
rural area of Southwest Virginia, and the majority of its customers are poorer
residents of the Appalachian regions of Virginia, Tennessee, Kentucky, and West
Virginia. Since his business is located in a rural area where there is little
competition, Tommy tends to charge about 1020% more than most other retail
outlets. Tommy recently came up with an idea for expanding his
business. He decided to begin selling his appliances and electronics
door-to-door in the above described regions. Until recently, it had been
working great. He hired some great salespeople who really know how to apply
the pressure and turn up the heat. Further, since he is providing a service to
these folks by bringing the goods to their homes, he charges about 30% more
than he would if the customers came to the store. Obviously, the salespeople do
not mention this fact to the customers. Further, since many of the customers are poor, relatively
uneducated and unsophisticated, and have poor credit, the vast majority of the
sales are financed by Takems. The salespeople get the customers to sign a bill
of sale, a security agreement, and a negotiable promissory note. When these
documents are processed back at the office, the clerk then files a financing
statement covering the goods sold to the customer in the appropriate state
office. For this, Takems charges a 15% application fee and the maximum rate of
interest allowed by law. The default rate is high, but through a combination of
collections, repossessions, fees and charges, higher prices, and markups, etc.,
Takems is doing very well. Recently, Tommy received a letter from a disgruntled
customer named Sally Walker (an elderly widow lady who lives alone in the hills
of Southwest Virginiaher children and grandchildren have all moved out of the
area.) She has fallen behind on her payments on her new laptop computer, and
Tommy had started collection efforts. He had not yet referred it to a lawyer.
The letter is very well written (which would be unexpected since Sally is not
very well educated.) It indicates that her granddaughter, who recently
graduated with an MS in Accounting from Liberty University Online helped her
with it. It argues that the entire deal is unconscionable and therefore
unenforceable. Further, it asserts that Sally has paid enough for the computer
and will not be paying any more. Finally, it threatens to sue for punitive
damages and write letters to the editors of various local papers throughout the
region if Takems pushes the matter further. Tommy is very upset. He wants to know whether the argument
in the letter has any merit. Should he take the threats
in the letter seriously or should he just proceed with collections? In other
words, is his business model legal? Further, he wants to know what he could do
to protect himself in the future. Would setting up a financing company that he
also owns and selling the notes to the financing company such that the
financing company becomes a holder in due course help? Finally, he wants to
know what you think about his business modelregardless of whether you conclude
that it is legal, is it moral/ethical?For this
research project, you will consider a very practical question. While it
mayinitially seem unrelated to the Christian worldview, as you study it, you
will see that it has deep implications for the Christian businessperson and the
Kingdom of God. The issue is: which form of business organization is best for
a client in a given situation and how should that entity be taxed? As noted, at first blush, this very practical question
may seem to have very little to do with the Christian worldview. That
conclusion, however, would be in error. The Bible is a very practical book and
it is concerned with every facet of our lives. There is no part of the universe
over which Jesus is not Lord (See, e.g.,
Matthew 28:18). Accordingly, there is no part of our lives with which He is
not concerned. Further, we as Christians should be good stewards of what
God has given us, and we should be about the business of being fruitful and
multiplying and taking dominion over the Earth (See, e.g., Genesis 1:2831, 9:1 and 7). A primary means for
accomplishing these goals is through just commercial activity conducted through
business enterprises. Consider this: the Pilgrims and Puritans who settled what
is now Massachusetts did so via the business organization known as a Joint
Stock Company. Business enterprises have developed cures for various diseases.
They have built skyscrapers that tower over the landscape like mountains and
dug vast tunnels under the sea beds. Businesses have been essential in
accomplishing this amazing level of dominion over the earth and helping us to
be fruitful and multiply and fill the earth just as God commanded. Therefore, choosing the right business organization form
and tax regime for a new business is very much a God-honoring endeavor. With
that said, now consider the following fact pattern for this research project:Alex, Bill,
Carl, and Devon inherit from their Dad an operating organic farm in New State.
The farm includes an orchard, various vegetable garden tracts, fields usually
planted in grains, several trout ponds, and a poultry operation. In addition to
selling the various organic products, the farm usually invites the public in
each year during the fall for a corn maze, pumpkin patch, and other amusements.
Alex, Bill, Carl, and Devon were never interested in farming, so their cousin,
Xavier, was trained to run the farming operation by Dad and has been helping
Dad do so for the past 5 years. Xavier wants to continue to do that, and Alex,
Bill, Carl, and Devon are willing for him to continue to do that. Therefore,
they want to form a business entity to own the farm, which Dad ran as a sole
proprietorship. Obviously, they dont want a lot of formalities or complexities
to fool with since they want Xavier to handle the day-to-day operations of
the farm. Further, they want to minimize their taxes on the entity, they want
to avoid any personal liability from the farming operations, and they want to
keep the business in the family (it might be fine to sell interests in the
business to their kids or to Xavier, but they would not want a stranger owning
part of the business).They have
discussed the deal with Xavier, and he is very excited. In fact, he proposes
that the business borrow an additional $500,000 and expand its operations to
include a vineyard. There is a bank willing to offer financing, but Alex, Bill,
Carl, and Devon would have to be willing to sign personal guarantees. They are
still thinking it over, but they probably will proceed with Xaviers plan for
expansion.They want you to
be their accountant in New State, and therefore they come to you for advice as
to which would be the best form of business organization to use for operating of
the farm.Alex, Bill,
Carl, Devon, and Xavier are all Christians and want their business to be
organized and operated in accordance with the Christian worldview.In view of their
situation described above, which form of business organization would you recommend?
Explain fully, including the strengths and weaknesses of each form of business
organization and be sure to make application to the specific facts of this
situation. Assume for the purposes of this assignment that New State has
typical statutes governing business organizations and that New States taxation
of business organizations follows the federal regime.Suggest Helpful
Resources:
For an excellent
article discussing the relative advantages and disadvantages of s-corporation
taxation and partnership taxation, see
Walter D. Schwidetzky, Integrating
Subchapters K and SJust Do It, 62 Tax Law. 749 (2009).For
an excellent discussion of one of the primary benefits of s-corporation
taxation for many closely held businesses, the minimization of employment
taxes, see Timothy M. Todd, Multiple-Entity Planning to Reduce
Self-Employment Taxes: Recent Cases Demonstrate the Pitfalls and How to Avoid
Them, 13 Journal of Tax Practice & Procedure 31 (April/May 2011).In this course,
you will be required to write 2Research Project papers. These papers will
require you to research and address realistic, hypothetical legal scenarios.
Each of these papers must be 710 pages in length (not including the title
page, abstract, and bibliography), in current APA format, with 1-inch margins,
double-spaced, and in 12-point Times New Roman font. Each paper must include
citations to adequate sources supporting and/or illustrating your positions.
Each paper must include a title page, abstract, and bibliography in current APA
format. Please see the grading rubric for additional information.These papers are
exercises in the application of the material covered in the course to realistic,
legal scenarios. You will be provided a prompt for each research project, and
your paper should thoroughly answer the questions presented in that prompt.Research Project
1 is due by 11:59 p.m. (ET) on Sunday of Module/Week 4.
Research Project
2 is due by 11:59 p.m. (ET) on Friday
of Module/Week 8.