One of the partners in the partnership of Easy and Money dies. The deceased partner's heirs want to liquidate the partnership interest. Analyze the rules regarding the liquidation of a partnership interest and provide a recommendation to the heirs as to the potential for triggering a taxable event. Support your recommendation with exs.
You are an IRS auditor assigned to a potential partnership fraud case for under reported income. The partnership owns restaurants and accepts customer payments in the form of cash, credit cards, and checks. The restaurant also pays vendors in cash, credit cards, or checks for services and food. Develop a plan to audit the restaurant and select key areas where you will focus your audit, indicating the risk and exposure to tax liabilities in these areas. Compile a list of the types of documentation you would require from the restaurant and include that with your plan.