Challenging college students with real-life tax problems.

• Author: Miller, Michele

Since 1992, Arthur Andersen LLP has sponsored Tax Challenge[R], an innovative and competitive program that provides graduate and undergraduate students exposure to real-world tax consulting in a team-oriented approach to problem solving. The teams vie for scholarship money to be awarded to their schools by the Andersen Foundation. The Andersen Foundation was created to promote educational and civic well-being in the communities and countries in which member firms of the Andersen Worldwide organization operate. Arthur Andersen's goal for this competition is to increase campus awareness of careers in taxation, while giving students a chance to apply their knowledge to a real-life situation.

The Competition

During the competition, four-member teams evaluate a hypothetical client's tax profile based on past, current and future tax data. Tax Challenge is a one-day case study that begins early in the morning and ends late in the afternoon. The case involves Federal tax issues confronting an individual or family with its own business, including compensation matters, investments, itemized deductions and related issues that affect the taxpayer's filing status and tax profile. Each team must prepare a written report, evaluating the client's tax situation and making tax planning recommendations. Teams are given a list of areas that must be addressed and are evaluated based on their written reports. The only reference materials available to the students during the competition are the Internal Revenue Code and Treasury regulations.

The Tax Challenge competition is open to both graduate and undergraduate students; however, the graduate and undergraduate divisions are judged separately. Teams first compete in regional competitions held at selected university sites throughout the country in late October. In 1995, 110 teams from more than 90 different institutions participated. Each team consists of no more than four students chosen by faculty representatives from the accounting and/or tax programs of their schools. Twenty teams, 10 from the graduate division and 10 from the undergraduate division, are then selected to compete at the national competition held in mid-November at the Center for Professional Education, Arthur Andersen's 140-acre training complex in St. Charles, Ill. At the national competition, the 20 teams complete a second case study, with the winners crowned Tax Challenge champions. In 1995, each division champion earned $20,000 for its...