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Student's Question: Set 1: the Code allows tax...

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Student's Question: Set 1: the Code allows taxpayers to take a deduction for the cost of meals when taxpayers have been deemed to be "away from home" for tax purposes. This determination can be difficult. Two separate clients came to you with questions as to whether they are entitled to take a deduction for the cost of meals incurred during a particular trip. The facts pertaining to each are: 1. Tracey is a sales representative for a national pharmaceutical company. She has a rather large sales territory, and she makes her rounds to her customers using a company-owned car over a 16- to 19-hour period of time. During these one-day business trips, Tracey will pull over in a suitable location (such as a park or a rest stop) and take a short nap in the backseat of her automobile. 2. Mark captains a ferryboat. This ferryboat carries tourists on roundtrips from Seattle to Victoria and back, each trip of which lasts from 15 to 17 hours and provides for a 6- to 7-hour layover in Victoria. During the layover, Mark typically takes a four-hour nap on a cot that he has stored in the pilothouse of the ferryboat. Set 2 It appears as though a couple of your clients have encountered an unfortunate development in their financial situation. Cindy and Ralph Edmonds own TidyCo., Inc. TidyCo, in turn, owns and operates several coin Laundromats in and around Dubuque, Iowa. Over the last two years, the Edmonds made weekly deposits of the Laundromat receipts to corporate and personal bank accounts. However, it now also appears (unknown to you!) That they also siphoned off a portion of the weekly collections and took them home rather than depositing them. These amounts, which appear to total about $200,000 were hidden in shoe boxes around the house and (surprise!) were not reported as income. The IRS found out about these amounts and has notified them that it intends to bring criminal tax evasion charges against them under Section 7201 of the Code. The IRS has made quite clear that it believes that the Edmonds actions constitute prima facie evidence that they intended to defraud the government and should therefore be liable under the statute. As their accountant, you know that TidyCo has a deficit in both its accumulated and current E&P accounts and that this deficit has existed over the entire period that the IRS contends the Edmonds illegally invaded income taxation. It also appears as though the Edmonds basis in their TidyCo stock is $300,000 (before the stashed-away money at their home is considered). Do these facts have any bearing on the evasion charges the IRS seeks to bring against them? i need to prepare a memorandum for both of them",I have uploaded the entire document incase I am unable to attach the actual PDF file. WEEK 7 RESEARCH PROJECT (Set #1) ACCT 429 IMPORTANT NOTE TO STUDENTS This assignment is being distributed solely for your use in completing the Week 7 project in DeVry University?s online Accounting 429 class. This assignment is an individual assignment, and you are to complete it without any outside assistance by any other student, individual, or outside materials, other than those specifically permitted by the problem. Any violations of these requirements will be addressed as an academic integrity violation. Similarly, this assignment may not be shared with any other student at any time, even after your completion of the course. Students to do so may be subject to sanctions pursuant to DeVry?s academic integrity policy, even though they may no longer be enrolled in Accounting 429. Performing tax research is an important part of tax practice. As outlined in Chapter 2 of your textbook, tax law is developed through a number of different governmental entities. Congress enacts the tax Code as statutory law. The Treasury Department is tasked with the implementation of the tax Code and, in the course of doing so, develops a number of documents and materials to aid taxpayers in understanding the Treasury Department's interpretation of the code, including the Regulations. In turn, the Internal Revenue Service ("IRS?) has the direct responsibility for implementing the tax Code and in assessing and collecting the applicable tax from taxpayers. In the course of its duties, it also develops a number of materials, including Revenue Rulings, Revenue Procedures, and Private Letter Rulings, in which it sets forth its understanding of the tax laws. Finally, the federal courts decide tax cases in which taxpayers contest the government's interpretation of the tax laws. In deciding these cases, the federal courts set forth binding interpretation of what the tax laws provide. All of these materials (often called primary resources) are important resources in performing tax research. On top of these primary sources of tax law, there are a number of secondary materials provided by various organizations and publishers. These secondary materials offer editorial analysis of the tax laws (somewhat akin to a Cliffs? Notes? on tax laws) to help tax practitioners understand the tax laws and apply them in given situations. Just as with the first project that was submitted in Week 3, the following assignment has three (3) different graded elements. Two of them require you to prepare tax file memoranda, while the remaining element requires you to compose an essay answering the question asked. AS SUCH, YOU WILL BE SUBMITTING THREE SEPARATE DOCUMENTS FOR THIS ASSIGNMENT. 1. The first two assignments require you to compose tax file memoranda. In each of these problems, you will be given a fact pattern or issue that requires you to decide or analyze a particular issue of tax law. You will also be provided with a number of the primary sources discussed above (e.g., Revenue Rulings, cases) on that issue of tax law. You will then compose a tax file memoranda concerning that taxpayer. You can find details as to how to compose such a memorandum in Chapter 2 of your text, including a sample text file memorandum in Figure 2.6 on page 2-26 of your text. Use the materials provided to determine the proper solution to the taxpayer?s issues. In particular, discuss the materials in some detail in the ?Analysis? section of the tax file memorandum. THIS IS IMPORTANT! The most important part of any tax file memorandum is the thoroughness of the analysis defending the conclusion reached in the memorandum. Accordingly, most of the points awarded on the assignment are allocated to the ?Analysis? section of the memorandum. In assessing these assignments, consideration will be given to, among other factors, (1) your accuracy in summarizing the relevant facts; (2) the accuracy of your identification and statement of the ?Issue? presented by the problem; (3) the accuracy of your ?Conclusion;? (4) the thoroughness and quality of your analysis offered in the ?Analysis? section of your memorandum; and (5) the overall professionalism of your memorandum (e.g., presentation, use of proper grammar, proper spelling, and quality of communication). EACH OF THE TAX MEMORANDA IS WORTH 30 POINTS, FOR A TOTAL OF 60 POINTS. 2. The remaining assignment requires you to perform some research on the Internet to find relevant materials and to analyze these materials. As previously noted, in performing this research, you may not take advantage of any resources other than those specifically permitted by the assignment, including assignments previously completed by other students or other similar materials. You will then complete an essay answering the question or questions presented by this assignment. Your submission will be graded on a number of factors, including (1) your ability to locate relevant research and materials on the Internet; (2) your ability to analyze these resources; (3) your ability to draw conclusions from these resources and to defend these conclusions with analysis of the research and materials located; and (4) the overall professionalism and content of your essay (e.g., presentation, use of proper grammar, proper spelling, and quality of communication). THIS ESSAY IS WORTH 20 POINTS. Please note that these assignments are worth a significant portion of your grade. As such, you should take them seriously, and leave yourself enough time to complete them. Do not wait until the last weekend to begin these assignments. If you do, it will be very difficult for you to submit quality responses to each of the four questions or problems posed. Please also note that preparing these answers conscientiously will help you in preparing for the final examination, given that you may be required to perform similar analyses on the exam. Should you have a question, please ask your instructor. Good luck! TAX RESEARCH MEMORANDUM ASSIGNMENT 1 As we learned in Week 4, the Code allows taxpayers to take a deduction for the cost of meals when taxpayers have been deemed to be "away from home" for tax purposes. This determination can be difficult. Two separate clients came to you with questions as to whether they are entitled to take a deduction for the cost of meals incurred during a particular trip. The facts pertaining to each are: 1. Tracey is a sales representative for a national pharmaceutical company. She has a rather large sales territory, and she makes her rounds to her customers using a company-owned car over a 16- to 19-hour period of time. During these one-day business trips, Tracey will pull over in a suitable location (such as a park or a rest stop) and take a short nap in the backseat of her automobile. 2. Mark captains a ferryboat. This ferryboat carries tourists on roundtrips from Seattle to Victoria and back, each trip of which lasts from 15 to 17 hours and provides for a 6- to 7-hour layover in Victoria. During the layover, Mark typically takes a four-hour nap on a cot that he has stored in the pilothouse of the ferryboat. Under each of these circumstances, if the taxpayer entitled to deduct the cost of meals purchased during the trip at issue? COMPOSE A TAX FILE MEMORANDUM CONCERNING THIS ISSUE FOR BOTH TAXPAYERS USING THESE FACTS AND THE RESEARCH MATERIALS PROVIDED TO YOU IN THE NEXT FEW PAGES (30 POINTS). Checkpoint Contents Federal Library Federal Source Materials Code, Regulations, Committee Reports & Tax Treaties Internal Revenue Code Current Code Subtitle A Income Taxes ??1-1563 Chapter 1 NORMAL TAXES AND SURTAXES ??1-1400U-3 Subchapter B Computation of Taxable Income ??61-291 Part VI ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS ??161-199 ?162 Trade or business expenses. Internal Revenue Code ? 162 Trade or business expenses. (a) In general. There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including? (1) a reasonable allowance for salaries or other compensation for personal services actually rendered; (2) traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business; and (3) rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity. For purposes of the preceding sentence, the place of residence of a Member of Congress (including any Delegate and Resident Commissioner) within the State, congressional district, or possession which he represents in Congress shall be considered his home, but amounts expended by such Members within each taxable year for living expenses shall not be deductible for income tax purposes in excess of $3,000. For purposes of paragraph (2) , the taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year. The preceding sentence shall not apply to any Federal employee during any period for which such employee is certified by the Attorney General (or the designee thereof) as traveling on behalf of the United States in temporary duty status to investigate or prosecute, or provide support services for the investigation or prosecution of, a Federal crime. (b) Charitable contributions and gifts excepted. No deduction shall be allowed under subsection (a) for any contribution or gift which would be allowable as a deduction under section 170 were it not for the percentage limitations, the dollar limitations, or the requirements as to the time of payment, set forth in such section. (c) Illegal bribes, kickbacks, and other payments. (1) Illegal payments to government officials or employees. No deduction shall be allowed under subsection (a) for any payment made, directly or indirectly, to an official or employee of any government, or of any agency or instrumentality of any government, if the payment constitutes an illegal bribe or kickback or, if the payment is to an official or employee of a foreign government, the payment is unlawful under the Foreign Corrupt Practices Act of 1977. The burden of proof in respect of the issue, for the purposes of this paragraph, as to whether a payment constitutes an illegal bribe or kickback (or is unlawful under the Foreign Corrupt Practices Act of 1977) shall be upon the Secretary to the same extent as he bears the burden of proof under section 7454 (concerning the burden of proof when the issue relates to fraud). (2) Other illegal payments. No deduction shall be allowed under subsection (a) for any payment (other than a payment described in paragraph (1) ) made, directly or indirectly, to any person, if the payment constitutes an illegal bribe, illegal kickback, or other illegal payment under any law of the United States, or under any law of a State (but only if such State law is generally enforced), which subjects the payor to a criminal penalty or the loss of license or privilege to engage in a trade or business. For purposes of this paragraph, a kickback includes a payment in consideration of the referral of a client, patient, or customer. The burden of proof in respect of the issue, for purposes of this paragraph, as to whether a payment constitutes an illegal bribe, illegal kickback, or other illegal payment shall be upon the Secretary to the same extent as he bears the burden of proof under section 7454 (concerning the burden of proof when the issue relates to fraud). (3) Kickbacks, rebates, and bribes under medicare and medicaid. No deduction shall be allowed under subsection (a) for any kickback, rebate, or bribe made by any provider of services, supplier, physician, or other person who furnishes items or services for which payment is or may be made under the Social Security Act, or in whole or in part out of Federal funds under a State plan approved under such Act, if such kickback, rebate, or bribe is made in connection with the furnishing of such items or services or the making or receipt of such payments. For purposes of this paragraph, a kickback includes a payment in consideration of the referral of a client, patient, or customer. (d) Capital contributions to Federal National Mortgage Association. For purposes of this subtitle, whenever the amount of capital contributions evidenced by a share of stock issued pursuant to section 303(c) of the Federal National Mortgage Association Charter Act ( 12 U.S.C., Sec. 1718 ) exceeds the fair market value of the stock as of the issue date of such stock, the initial holder of the stock shall treat the excess as ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. (e) Denial of deduction for certain lobbying and political expenditures. (1) In general. No deduction shall be allowed under subsection (a) for any amount paid or incurred in connection with? (A) influencing legislation, (B) participation in, or intervention in, any political campaign on behalf of (or in opposition to) any candidate for public office, (C) any attempt to influence the general public, or segments thereof, with respect to elections, legislative matters, or referendums, or (D) any direct communication with a covered executive branch official in an attempt to influence the official actions or positions of such official. (2) Exception for local legislation. In the case of any legislation of any local council or similar governing body? (A) paragraph (1)(A) shall not apply, and (B) the deduction allowed by subsection (a) shall include all ordinary and necessary expenses (including, but not limited to, traveling expenses described in subsection (a)(2) and the cost of preparing testimony) paid or incurred during the taxable year in carrying on any trade or business? (i) in direct connection with appearances before, submission of statements to, or sending communications to the committees, or individual members, of such council or body with respect to legislation or proposed legislation of direct interest to the taxpayer, or (ii) in direct connection with communication of information between the taxpayer and an organization of which the taxpayer is a member with respect to any such legislation or proposed legislation which is of direct interest to the taxpayer and to such organization, and that portion of the dues so paid or incurred with respect to any organization of which the taxpayer is a member which is attributable to the expenses of the activities described in clauses (i) and (ii) carried on by such organization. (3) Application to dues of tax-exempt organizations. No deduction shall be allowed under subsection (a) for the portion of dues or other similar amounts paid by the taxpayer to an organization which is exempt from tax under this subtitle which the organization notifies the taxpayer under section 6033(e)(1)(A)(ii) is allocable to expenditures to which paragraph (1) applies. (4) Influencing legislation. For purposes of this subsection ? (A) In general. The term ?influencing legislation? means any attempt to influence any legislation through communication with any member or employee of a legislative body, or with any government official or employee who may participate in the formulation of legislation. (B) Legislation. The term ?legislation? has the meaning given such term by section 4911(e)(2) . (5) Other special rules. (A) Exception for certain taxpayers. In the case of any taxpayer engaged in the trade or business of conducting activities described in paragraph (1) , paragraph (1) shall not apply to expenditures of the taxpayer in conducting such activities directly on behalf of another person (but shall apply to payments by such other person to the taxpayer for conducting such activities). (B) De minimis exception. (i) In general. Paragraph (1) shall not apply to any in-house expenditures for any taxable year if such expenditures do not exceed $2,000. In determining whether a taxpayer exceeds the $2,000 limit under this clause, there shall not be taken into account overhead costs otherwise allocable to activities described in paragraphs (1)(A) and (D) . (ii) In-house expenditures. For purposes of clause (i) , the term ?in-house expenditures? means expenditures described in paragraphs (1)(A) and (D) other than? (I) payments by the taxpayer to a person engaged in the trade or business of conducting activities described in paragraph (1) for the conduct of such activities on behalf of the taxpayer, or (II) dues or other similar amounts paid or incurred by the taxpayer which are allocable to activities described in paragraph (1) . (C) Expenses incurred in connection with lobbying and political activities. Any amount paid or incurred for research for, or preparation, planning, or coordination of, any activity described in paragraph (1) shall be treated as paid or incurred in connection with such activity. (6) Covered executive branch official. For purposes of this subsection , the term ?covered executive branch official? means? (A) the President, (B) the Vice President, (C) any officer or employee of the White House Office of the Executive Office of the President, and the 2 most senior level officers of each of the other agencies in such Executive Office, and (D) (i) any individual serving in a position in level I of the Executive Schedule under section 5312 of title 5, United States Code , (ii) any other individual designated by the President as having Cabinet level status, and (iii) any immediate deputy of an individual described in clause (i) or (ii) . (7) Special rule for Indian tribal governments. For purposes of this subsection , an Indian tribal government shall be treated in the same manner as a local council or similar governing body. (8) Cross reference. For reporting requirements and alternative taxes related to this subsection , see section 6033(e) . (f) Fines and penalties. No deduction shall be allowed under subsection (a) for any fine or similar penalty paid to a government for the violation of any law. (g) Treble damage payments under the antitrust laws. If in a criminal proceeding a taxpayer is convicted of a violation of the antitrust laws, or his plea of guilty or nolo contendere to an indictment or information charging such a violation is entered or accepted in such a proceeding, no deduction shall be allowed under subsection (a) for two-thirds of any amount paid or incurred? (1) on any judgment for damages entered against the taxpayer under section 4 of the Act entitled ?An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes?, approved October 15, 1914 (commonly known as the Clayton Act), on account of such violation or any related violation of the antitrust laws which occurred prior to the date of the final judgment of such conviction, or (2) in settlement of any action brought under such section 4 on account of such violation or related violation. The preceding sentence shall not apply with respect to any conviction or plea before January 1, 1970, or to any conviction or plea on or after such date in a new trial following an appeal of a conviction before such date. (h) State legislators' travel expenses away from home. (1) In general. For purposes of subsection (a) , in the case of any individual who is a State legislator at any time during the taxable year and who makes an election under this subsection for the taxable year? (A) the place of residence of such individual within the legislative district which he represented shall be considered his home, (B) he shall be deemed to have expended for living expenses (in connection with his trade or business as a legislator) an amount equal to the sum of the amounts determined by multiplying each legislative day of such individual during the taxable year by the greater of? (i) the amount generally allowable with respect to such day to employees of the State of which he is a legislator for per diem while away from home, to the extent such amount does not exceed 110 percent of the amount described in clause (ii) with respect to such day, or (ii) the amount generally allowable with respect to such day to employees of the executive branch of the Federal Government for per diem while away from home but serving in the United States, and (C) he shall be deemed to be away from home in the pursuit of a trade or business on each legislative day. (2) Legislative days. For purposes of paragraph (1) , a legislative day during any taxable year for any individual shall be any day during such year on which? (A) The legislature was in session (including any day in which the legislature was not in session for a period of 4 consecutive days or less), or (B) The legislature was not in session but the physical presence of the individual was formally recorded at a meeting of a committee of such legislature. (3) Election. An election under this subsection for any taxable year shall be made at such time and in such manner as the Secretary shall by regulations prescribe. (4) Section not to apply to legislators who reside near capitol. For taxable years beginning after December 31, 1980, this subsection shall not apply to any legislator whose place of residence within the legislative district which he represents is 50 or fewer miles from the capitol building of the State. (i) Repealed. (j) Certain foreign advertising expenses. (1) In general. No deduction shall be allowed under subsection (a) for any expenses of an advertisement carried by a foreign broadcast undertaking and directed primarily to a market in the United States. This paragraph shall apply only to foreign broadcast undertakings located in a country which denies a similar deduction for the cost of advertising directed primarily to a market in the foreign country when placed with a United States broadcast undertaking. (2) Broadcast undertaking. For purposes of paragraph (1) , the term ?broadcast undertaking? includes (but is not limited to) radio and television stations. (k) Stock reacquisition expenses. (1) In general. Except as provided in paragraph (2) , no deduction otherwise allowable shall be allowed under this chapter for any amount paid or incurred by a corporation in connection with the reacquisition of its stock or of the stock of any related person (as defined in section 465(b)(3)(C) ). (2) Exceptions. Paragraph (1) shall not apply to? (A) Certain specific deductions. Any? (i) deduction allowable under section 163 (relating to interest), (ii) deduction for amounts which are properly allocable to indebtedness and amortized over the term of such indebtedness, or (iii) deduction for dividends paid (within the meaning of section 561 ). (B) Stock of certain regulated investment companies. Any amount paid or incurred in connection with the redemption of any stock in a regulated investment company which issues only stock which is redeemable upon the demand of the shareholder. (l) Special rules for health insurance costs of self-employed individuals. (1) Allowance of deduction. (A) In general. In the case of an individual who is an employee within the meaning of section 401 (c)(1) , there shall be allowed as a deduction under this section an amount equal to the applicable percentage of the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents. (B) Applicable percentage. For purposes of subparagraph (A) , the applicable percentage shall be determined under the following table: For taxable years beginning The applicable in calendar year -- percentage is -- 1999 through 2001 60 2002 70 2003 and thereafter 100. (2) Limitations. (A) Dollar amount. No deduction shall be allowed under paragraph (1) to the extent that the amount of such deduction exceeds the taxpayer's earned income (within the meaning of section 401(c) ) derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established. (B) Other coverage. Paragraph (1) shall not apply to any taxpayer for any calendar month for which the taxpayer is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of the taxpayer. The preceding sentence shall be applied separately with respect to? (i) plans which include coverage for qualified long-term care services (as defined in section 7702B(c) ) or are qualified long-term care insurance contracts (as defined in section 7702B (b) ), and (ii) plans which do not include such coverage and are not such contracts. (C) Long-term care premiums. In the case of a qualified long-term care insurance contract (as defined in section 7702B(b) ), only eligible long-term care premiums (as defined in section 213(d) (10) ) shall be taken into account under paragraph (1) . (3) Coordination with medical deduction. Any amount paid by a taxpayer for insurance to which paragraph (1) applies shall not be taken into account in computing the amount allowable to the taxpayer as a deduction under section 213(a) . (4) Deduction not allowed for self-employment tax purposes. The deduction allowable by reason of this subsection shall not be taken into account in determining an individual's net earnings from self-employment (within the meaning of section 1402(a) ) for purposes of chapter 2. (5) Treatment of certain S corporation shareholders. This subsection shall apply in the case of any individual treated as a partner under section 1372(a) , except that? (A) for purposes of this subsection , such individual's wages (as defined in section 3121 ) from the S corporation shall be treated as such individual's earned income (within the meaning of section 401(c)(1) ), and (B) there shall be such adjustments in the application of this subsection as the Secretary may by regulations prescribe. (m) Certain excessive employee remuneration. (1) In general. In the case of any publicly held corporation, no deduction shall be allowed under this chapter for applicable employee remuneration with respect to any covered employee to the extent that the amount of such remuneration for the taxable year with respect to such employee exceeds $1,000,000. (2) Publicly held corporation. For purposes of this subsection, the term ?publicly held corporation? means any corporation issuing any class of common equity securities required to be registered under section 12 of the Securities Exchange Act of 1934. (3) Covered employee. For purposes of this subsection, the term ?covered employee? means any employee of the taxpayer if? (A) as of the close of the taxable year, such employee is the chief executive officer of the taxpayer or is an individual acting in such a capacity, or (B) the total compensation of such employee for the taxable year is required to be reported to shareholders under the Securities Exchange Act of 1934 by reason of such employee being among the 4 highest compensated officers for the taxable year (other than the chief executive officer). (4) Applicable employee remuneration. For purposes of this subsection ? (A) In general. Except as otherwise provided in this paragraph, the term ?applicable employee remuneration? means, with respect to any covered employee for any taxable year, the aggregate amount allowable as a deduction under this chapter for such taxable year (determined without regard to this subsection ) for remuneration for services performed by such employee (whether or not during the taxable year). (B) Exception for remuneration payable on commission basis. The term ?applicable employee remuneration? shall not include any remuneration payable on a commission basis solely on account of income generated directly by the individual performance of the individual to whom such remuneration is payable. (C) Other performance-based compensation. The term ?applicable employee remuneration? shall not include any remuneration payable solely on account of the attainment of one or more performance goals, but only if? (i) the performance goals are determined by a compensation committee of the board of directors of the taxpayer which is comprised solely of 2 or more outside directors, (ii) the material terms under which the remuneration is to be paid, including the performance goals, are disclosed to shareholders and approved by a majority of the vote in a separate shareholder vote before the payment of such remuneration, and (iii) before any payment of such remuneration, the compensation committee referred to in clause (i) certifies that the performance goals and any other material terms were in fact satisfied. (D) Exception for existing binding contracts. The term ?applicable employee remuneration? shall not include any remuneration payable under a written binding contract which was in effect on February 17, 1993, and which was not modified thereafter in any material respect before such remuneration is paid. (E) Remuneration. For purposes of this paragraph , the term ?remuneration? includes any remuneration (including benefits) in any medium other than cash, but shall not include? (i) any payment referred to in so much of section 3121(a)(5) as precedes subparagraph (E) thereof , and (ii) any benefit provided to or on behalf of an employee if at the time such benefit is provided it is reasonable to believe that the employee will be able to exclude such benefit from gross income under this chapter. For purposes of clause (i) , section 3121(a)(5) shall be applied without regard to section 3121(v) (1) . (F) Coordination with disallowed golden parachute payments. The dollar limitation contained in paragraph (1) shall be reduced (but not below zero) by the amount (if any) which would have been included in the applicable employee remuneration of the covered employee for the taxable year

 

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