Assuming the role of the reviewer with a professor-prepared tax return.

• Author: Krieg, Kimberly S.

Hands-on learning, or learning by doing, is a valuable tool in helping students connect what they learn through reading and lectures to the real-world situations they may encounter after graduation. In the tax classroom, one such example at both the undergraduate and graduate level is a practice tax return assignment. With these student-prepared tax returns, professors supply source documents or other client information, and the students complete the return by entering the information into a tax software program or by handwriting directly onto the tax forms.

However, preparing a return does not necessarily demonstrate conceptual knowledge of income tax laws. A May 2019 Campus to Clients article proposed flipping the tax return assignment as a way to better meet learning objectives (Vitale, "Campus to Clients: Flip the Tax Return with a Professor-Prepared Tax Return," 50 The Tax Adviser 378 (May 2019)). The purpose of this column is to expand upon the idea of the professor-prepared tax return with an additional twist of providing a professor-prepared return with intentional errors where students assume the role of the reviewer and demonstrate a mastery of concepts while obtaining valuable real-world experience.

Drawbacks of the traditional practice tax return assignment

While exposure to income tax forms is certainly relevant for accounting students (both personally and professionally), assigning a student-prepared tax return has several drawbacks. If tax software is used, the professor must provide students with training on how to input the client information, using already limited class time. In addition, students must gain access to the software and have the use of an electronic device on which to install the software, which may be cost-prohibitive or not equally accessible for all students. While some publishers may include access to tax software (e.g., H&R Block or TaxAct) with the purchase of the textbook, each program has a different input method, and it is unlikely that the software used in the classroom will be the same software that students use after graduation as they enter the accounting profession. Thus, time and resources must be devoted to software training rather than the core content of the class.

Another drawback of student-prepared tax returns is the focus on data entry within the tax software program. Students might focus more on where to input specific taxpayer information than on understanding the output and how the client information is ultimately presented on the tax return.

To avoid these issues associated with using tax preparation software, students can instead be asked to complete the tax forms by hand. However, this approach has drawbacks as well. Professors must often design the client information to limit the number of forms and schedules students must complete. Despite these attempts to simplify client information, the intricacies of the tax forms themselves may overwhelm students and draw attention away from increasing their understanding of income tax laws, thereby countering the purpose of this type of assignment. For example, a student attempting to report a simple longterm capital gain on Schedule D, Capital Gains and Losses, would be confronted with references to numerous other forms, carryovers, distributions, the 28% collectible rate, and unrecaptured Sec. 1250 gains.

Furthermore, student errors in, or omissions from, pro forma information, such as names and Social Security numbers (typically auto-populated at the top of each form), or failing to answer yes/no questions on various schedules poses a grading conundrum for the professor: While technically incorrect, failing to accurately complete this information does not necessarily demonstrate a lack of understanding of the income tax laws covered in the class. Using handwritten forms can also focus students' learning on where to include the information, and students may narrowly focus on following each line's instructions rather than stepping back and thinking about what they are actually calculating.

The professor-prepared tax return with intentional errors

To help address some of these issues, the May 2019 Campus to Clients column suggested flipping the assignment and...