This webinar starts with a brief introduction to the D’Amore-McKim School of Business and our Online Master of Science in Taxation program. Then Professor Gagnon provides some background information before diving into his presentation on trends in taxation.
Angela LaGamba: Welcome to Northeastern University’s online Master of Science in Taxation. Our webinar today is entitled Tax Trends in 2014. My name is Angela and I will be your moderator and host for today. Before we begin, I’d like to go over some of the logistics for the presentation. And also give you some commonly asked questions, I’ll give you some of those responses.
Again, you are in listen only mode so you can hear our two panelists today. If you have any questions throughout the session, feel free to use the chat box on the lower right-hand side of the screen and we’ll be taking questions throughout the session and we also have a dedicated Q&A where we will be addressing the bulk of your questions. The session today is being recorded, so you can view it in the future.
Your two panelists are Professor Timothy Gagnon and Michelle Yan. Professor Gagnon is the faculty director of the online Master of Science and taxation program at Northeastern University and he’s also a former partner at Coleman & Gagnon. Michelle is an enrollment advisor on Northeastern University’s online Master of Science in taxation and her role is to help perspective students through the application and admissions process. And again, I’ll be your host and moderator for today’s session. I’m gonna hand it over to Michelle now to talk a little about the school of business and the MST program. Go ahead Michelle.
Michelle Yan: Our MS in taxation program is part of the D’Amore-McKim School of Business. It was established in about 1922 and has a rich history, a strong reputation for scholarly research and teaching excellence.
We are accredited by the AACSB International, one of the highest business accreditations worldwide. The main campus is located in Boston, Massachusetts and we do have satellite campuses in Charlotte, North Carolina and Seattle, Washington.
Building on great academic achievement, wide ranging work and consulting experience, rich diversity and our extensive corporate ties, D’Amore-McKim School of Business faculty members are leaders in their field and regularly receive worldwide recognition and awards for their contributions to theory and practice of management. We do have a global network of over 200,000 Northeastern alumni, spanning more than 50 countries, like China, Canada, India, England, Russia and Australia to name a few. Almost 90% of our students pursuing graduate business degrees have work experience, so our programs are very accommodating and flexible.
The online MS in tax program was designed with the working tax professional in mind. They’ll help you to increase your technical tax knowledge, sharpen your research skills, help you keep up-to-date with tax laws – we all know it’s constantly changing – analyze complex regulations, related cases and rulings. We will also give you the opportunity to interact with faculty members who are not only educators but practitioners in the field. So, they do bring in a lot of real life case studies to help you with your learning.
Now, there are a variety of tax professionals coming into this program as well. I mean we do have many students coming from a lot of public accounting firms, which I know many of you are probably going through tax seasons right now. A lot coming from private industry, the IRS and of course the big four firms as well. So, it is a fantastic opportunity to collaborate on cases, trade ideas, learn from each other, a develop a strong networking opportunity. Now, I would like to turn it over to Professor Tim Gagnon who is our faculty director for the online MS in taxation program. Professor?
Timothy Gagnon: Welcome. As you can probably see from the screen, I am getting older and wiser, or at least my hair is going away, I don’t know which. But I spent over 30 years in practice before going into full-time teaching, but still have a practice on the side because trying to keep ahead of the tax laws really requires a lot of practical experience, but I’ve dealt with everything personal law and corporate tax and individual and really have a forte or a strong understanding or my area of concentration is really in stiffs and gifts, which is the estate planning, administration, probate are those type areas dealing with taxes when you’re alive and when you’re dead and then how do we take and tax the trust to go with them?
I’ve been on the full-time faculty here for six years, but spent 20 years before that on the adjunct faculty at Northeastern, so it’s become a home away from home, I guess I would say. Or as my wife tells me many times, I seem to live at this school more than I do at home. But that’s all right, I enjoy it.
We’re very focused on trying to take the practical and apply it to the theoretical. I know that sound strange, but as all of you probably found in tax practice, the theory is one thing and now how do you apply it, how do you get it through, how do you find where the practical comes into play and that’s what we try to bring to each one of the classes. I know on my own courses, we deal a lot of with the theory, but then we bring in a lot of the real life examples and say, okay, this is what it says, now this is how it interacts, this is how it comes into interaction. And this is where it’s really going to go in the future or this is where the trend seems to be, because we’re always, as tax professionals, trying to get a feel for where it’s going down the road so that we can do better planning for our clients. Because if you just do compliance, you’re always looking backwards. If you’re doing planning, you’re always looking forward and trying to guess where forward is.
Many of us spent the last couple years trying to guess where the tax code was going to occur and what was going to occur and I’d like to say we were all 100% exact and right, but a few things slipped through that we didn’t really see. I’m not sure we all saw the 3.8 or the .09 that came about with the Affordable Care Act, but now they’re there, now how do to deal with them and now how do you plan around them is one of the bigger questions that we have going forward.
Next slide, Angela. There we go. So, let’s talk about some of trends. I sort of reference that we’re always trying to find them. So, let’s look at four different areas of what some of the trends that are going on. On the international side, we’re seeing a lot more companies in states and countries trying to get more competitive. They’re trying to find ways to be more competitive from their tax system to entice business and individuals to come there. Not totally now with just straight incentives. You know, as many towns used to do, we’ll forgive your real estate taxes for five years if you’ll come build a plant.
On the other side, they’re now saying, hey how can we become more competitive with better rates, but also how can we make our rules more favorable to businesses that wanna come in? And if they’re here, how do we increase our take on the business? Now, maybe that’s by having the value added tax. Maybe that’s by stepping up the use tax and collecting on it or collecting on the sales tax.
And all of those require, on the international side, a lot more audits, a lot more understanding from their standpoint. So, we’re seeing a lot more experience and knowledgeable auditors or tax professionals on the government side, so that they’re now starting to understand better the book and tax differences. If many of you were in tax of realize the ASC740, FASBI 109, 1048, all of those things dealing with deferred taxes, the international community is starting to look at them and starting to understand what they mean and then also starting to understand that we have to keep an eye also on transfer pricing. But they’re trying to say, hey wait a minute, we see what your book income is, why doesn’t your tax income match that? Where is that difference? Where is that variance? We’re seeing a lot more focus on the international side and a lot more dedication to looking at returns, looking at books and saying hey we think you’re missing something here. They’re also coordinating with each other which is an even bigger challenge for us.
But, they really said hey, there’s a lot more money that can be made out of our current tax regime and out of our current people. But on the other side of that, we have to be somewhat competitive so we don’t lose all of our international business, because international business and international trade is becoming a bigger mainstay from a worldwide approach. When if you think about it, there’s more and more international work, there’s more and more companies with international touches that cause totally different tax responsibilities.
And we, within the MST online we have two different international tax classes. We have an inbound and an outbound, because there’s a very big difference between how the taxes are handled. But it’s become such a large area that it’s just an area that we, unfortunately, have to become more knowledgeable about, have to become more involved with because many of us, for many years tried to ignore international. You can’t anymore because even your small businesses are going out on the international side and many of your states are making large inroads trying to get their businesses to the international.
So, we have to be very aware from our tax side of what the impact is, how the international taxes will affect and what are they looking at, how do we best advise the client to structure their deals in order to maybe get taxable income closer to book or at least have a better analysis of the differences. And to be better able to represent our clients in the audits with the auditors because we are seeing more of them even willing to come to the U.S. and do the audit to look at things. So, it’s not like they’re handling the audit only in Belgium. They’re now starting to come more to the U.S. and say, hey we’re coming over, we wanna review the books, we wanna see it there, we wanna know what’s going on because we think there’s more opportunity for us to collect more taxes.
Next slide. So, we get to my favorite place and that’s the estate and gift. As you’re all probably aware or seen out there, we now have a federal unified credit of $5.25 million for each of us if we die tomorrow. We can pass that without any estate tax. So, on the federal side, we are starting to see some very large exemptions. So, everybody’s saying wow I don’t have to worry about estate taxes anymore. I get a married couple ten and a half million dollars before I have to pay taxes and it seems wonderful. Hey, that’s probably gonna be a dying area everybody told me.
But you gotta take a step back because although the federal may be at 5.25, each of the individual states has its own system. And the state may have a $600,000 exemption or a million or a 575, so we’re seeing on the estate and gift tax side a move way from planning and having to worry about a federal tax on your death. But now we’re seeing a lot more focus on knowing the different state estate taxes to know what happens in each of the states that you have property in. And just as an aside, any state that you have real property in has access to your estate on your death and charges an estate tax. They prorate between them.
So, everybody always tells me, we’re in Massachusetts and everyone says, well I have a house in Florida so that won’t matter. Yes, it does because Florida, although they’ve gotten rid of their estate case, Mass says, well if it’s in Florida, we don’t get to charge for it. So, now you’ve got to do your planning as to what you can do. Or maybe you need to take real property for the state’s purposes and turn it into personal property by putting it in some form of entity.
So, estate and gift is an area that’s getting a lot more attention because as the federal has gone up and the federal was the easier one, because it crossed all the jurisdictions. It was the one that hey we all deal with it and that’s the big bad one. Well, now federal’s getting large enough that it’s not the big bad one. But on the other side, every one of the states is having to look at saying, hey wait a minute, there’s a bigger tax sitting there than I wanna pay in the federal. Yeah, I’m not gonna pay the 40% to the fed, but the state’s gonna charge me 16% of every asset over $1 million. And you’re all going, I don’t have a $1 million estate.
Keep in mind an estate includes the face value of any life insurance you own, your 401(k) plan, the equity in your house, your savings, your investing, all that thrown in. More and more for crossing the threshold. That million dollar exemption for the state or that 600 in other states is not that hard to cross. So, we’re seeing a lot more tax planning on the estate and gift, on the individual state side as opposed to the federal side. So, it’s not an area that’s going away, but it’s an area seeing a lot of different changes.
And many of you probably heard when the last round went through that we got portability, which is the ability to use your spouse’s unused credit on the federal side only though, not on the states. So, you’re having to try to plan from two different tax statutes, two different tax areas. So, the planning has become a lot more integrated and a lot more specific client by client. So, that’s where the really good excitement occurs from my standpoint. But we all know stiffs and gifts attorneys are always kind of strange.
Next slide. Ah, the individual income tax. One that affects all of us, unfortunately. We’ve all seen with the Affordable Care Act, we’ve now got the 3.8% on the net invested income once you pass the 200 individual, 250 married couple, it’s out there. Doesn’t seem too bad, but maybe you can find ways to plan around it so that you don’t get something. Maybe you’re looking at different compensation plans so that you don’t trigger into them. We’re seeing a lot more companies and individuals talking to their companies saying hey, I’d like to defer more of my income to later years so that I don’t exceed that limit. So, I can hold it off, I’ll pay on it later, but I wanna have a deferral plan in place, which of course has its own issues and income supporting it.
So, it’s getting to know how defer tax works, how defer plans work, what’s the tax impact going through, will they be included into tax or not, will it be subject to Social Security taxes or not. All that having to be looked at because you need to know how the deferred is going to go. So, we’re seeing a lot more planning from that side. And all of you realize that the over 200 on wages yet, the .09 that was tacked on. But how many of your clients don’t realize these numbers. And when they go to file their returns, they’re gonna get a great surprise because they exceeded the .09 because they were married and neither one of them passed 200 on their own, but together their wages passed 250. And .09 is owed and everything above 250.
So, we’re seeing a lot more awareness of that, so that’s a lot more planning has to be done with clients. But it’s also a lot more sensitivity we, as practitioners, have to have in the tax planning standpoint. And in the tax projections that we’re doing for clients, we need to be aware of those and how they’re coming into play. And then of course, we’re all aware, unfortunately, that the Ps exemptions have come back. So, now itemized deductions are back on the phase out and the personal exemptions are back on the phase out, which makes a large difference to our hiring income tax payers to get back to that. That you liked their 100% deductions. Now, they’re phasing out which means you’ve gotta be a lot more aware of those and how those phase outs work and we’ll give better advise on to what the tax can be owed or wage around.
And again, is there planning opportunities so we can avoid the phase outs. Is there ways that we can adjust to them? Is there ways we can use different vehicles? Can we use accumulation vehicles as opposed to current income? Can I overfund a life insurance in order to build up a humungous balance which I can then take out as a loan and not pay income tax on it and not have to worry about putting it on my tax return because it’s just a loan for my life insurance policy, not a distribution, not a collapsible policy and I don’t have to pay taxes on it.
So, is that something that we’re gonna have to be able to better plan from a client standpoint? But that means that we have to be much more knowledgeable about that area and we have courses within the program that talk about insurance and investments and tax ramifications and how they work and when they work and what they work. So, it’s really an attempt to try to get a lot more of the practical in, because we’ve all read the code. We’ve all seen the changes. But how do we now actually apply them? How do you do this? How do you structure it? How do you work it?
I know in my research course that I teach, we are researching right now the deductibility of the different benefit plans and how and what we can deduct and when and who can deduct it and how to plan around the thresholds and the cutoffs. Because, I mean take one for instance, you got a 10% cut off of medical on schedule A and the 1040, that’s – how do I plan around so either I get all my medical in a pre-tax basis? Can I get a higher deductible plan? What’s the tax implications? How do you analyze the high deductible plans and the costs as opposed to taking the full-blown plan that has a very low deductibility. How do you analyzes between them? How do you equate? How do you indicate or is determined the tax ramifications? Which is an interesting practice, an interesting exercise.
But it’s something that we’re seeing more and more a need for, but for a lot of us, it’s getting more and more knowledge about that to know to go look at it or to know more about it so that we know where we’re going with it. What can we do? How can we do? What will be effective from a tax standpoint. But also, if we’re doing planning and we know that’s in place today, what’s the projection going down? Where do we see Congress or the IRS talking about taking these two, or where do we see the IRS coming in and making their rulings or the court cases and how have they impacted on this? What’s held, what hasn’t held? What does the IRS acquiesce to? What are they targeting or not targeting.
We see that not just individual but on the corporate level with the identified tax positions. Is the IRS targeting or what information are we giving them? What would allow them to target which would certainly make a difference of how you plan if it seems to be a hot topic for them. And the only way you know if it’s a hot topic is if you look at where their audits, where are the cases coming up? Where are the issue and revenue roles? Where are they coming in with different private letter rulings and what are the answers?
So a lot of our time is spent from an individual standpoint and it’s trying to better understand the state of affairs today and project them going forward. And then if all of us get out our crystal ball and try to guess what the changes are gonna be from Congress and my crystal ball is about as cloudy as it can get in trying to guess where they’re going. But I’m constantly having to do that from a client standpoint because your client wants to know what do you see, what do you hear, what do you think’s gonna happen?
To do that, you have to get a good base on what the rules are today and where are the avenues, the gray areas that you can plan through. We all know that black and white you have to follow, but there’s a lot of gray in the statutes. There’s a lot of gray in the case law. So, that’s where a lot of our clients are saying hey, find me the gray area, how do I save taxes? Which is very important to the clients and I guess you can say it’s important to us too because that’s what they pay us for and that’s where our billing goes. And sorry to say that’s something we’re always worried about is billing. The next slide please.
So we got the corporate and I’m sure many of you have been around a while, have known that every time somebody sets a corporation up, they make it an S corp. And then of course the question always comes why? Why is it an S corp? And I can tell you that when we saw the 86 Act come out and at the individual tax rates were lower than the corporate tax rates, we’re certainly not higher, we said okay be an S corp, pass it through, one level of taxes, you’ll pay less tax.
But today, the individual rates are looking like they’re not gonna be lower than the corporate rates. Corporate rates being around 35, but the individual rates now, you could end up at a 39 ½, you’ve got an extra 3.8, you’ve got an extra .09. Suddenly the individual rates are starting to be into the 40s, maybe 45. And the corporate rate’s sitting down there at 35.
So, there’s a trend now to start saying, hey wait a minute, should the corporation be a C corp? Let’s pay at the lower rate and of course everybody says yeah but we’re gonna pay a second level of tax coming out. But maybe, maybe not. Maybe if we use the C corp at the lower rate, maybe we can put more benefit plans into the corporation. We can have more benefits for the owners or the high wage earners, therefore we can get a deduction with the C corp, taking its revenue or rates and that income down, taxable. And we’ll pay at a lower rate and I can get more things through from the standpoint of deductions that I couldn’t get on the personal side or even passing them through, I’d still be doing things or having to pay that extra income at 4-5% higher than we were originally at.
So, we’re seeing corporate is static as it would seem saying, well if you’re a small corporation be an S, if you’re a big corporation be a C. More of the smaller corporations are starting to say, wait a minute, maybe we should be a C because we look at the benefits we can deduct and we pay the lower rate of the corporate as opposed to the higher individual rate.
And take that and put that into analysis also when you think about the LLCs, the LLPs out there, they’re all coming through now at the personal rate. So, maybe inside of an LLC you should be thinking or the client may wanna think about his C corp because of the tax ramifications, because everything dumps through. Second part of that, as we all know, LLCs as partnerships, everything that comes through them is subject to Social Security tax.
S corps at current only have Social Security on the wages paid but not on the excess distribution on the K-1. Now there’s a discussion that will be subject to the 3.8 when you pass the certain limit, like the 200 or 250 of a married couple. Then you have the 3.8, but that’s what’s coming through there, but if you’re not above the 200, 250, then what’s coming through the S doesn’t get subject to the 3.8. So, the LLC was subject to Social Security. The S isn’t getting subject to Social Security. So, again there’s a tradeoff.
So a large part from a corporate tax standpoint, there’s a lot more analysis having to be done to compare choice of entity from a tax ramification. But also, choice of tax, which tax would we rather be subject to, the self-employment tax at the effect of 13 or do I wanna be subject to that distribution to the 3.8 under the Affordable Care Act? Which rates work best? Which rates don’t work best.
So a lot of the trends we’re seeing out there are a lot more planning trends from the accountant’s standpoint, from the CPA’s standpoint, a lot more planning that can be done to keep client’s taxes down. But also a lot more planning having to be done from a forward looking and needing a good base to get there, but from a forward looking because things we’ve put into place today are gonna have an effect going forward. So, what’s the ramification as we go along? What are the trends that are coming in? What do we need to analyze? We can’t analyze in a static of yeah, today this would happen, but what’s happening going forward and what would be the impact going forward?
And that’s what we try to spend quite a bit of time in the different courses within the degree of trying to get you the base as to what’s happening. But now, how do you get around those? Where do they go? What are they gonna be? How do you plan going forward? How do you determine the impact? How do you do the strategy?
I spend quite a bit of time in a couple of my courses just trying to say okay, what’s the future look like and how do you plan for that future? How do we do deals today or do setups today that will have the impact down the road that will maybe minimize our taxes on the long term as opposed to on the short term because I guess I’ve yet to meet a client who told me – well I did meet one client once who said they wanted to pay more taxes. Most of them say they want to pay as low as I have to and they’re really looking to us to have the knowledge and the experience to try to minimize those taxes wherever possible, totally in compliance with the rules, the regulations, the code, the regs, the case is totally compliance with that. But you have to have a sound foundation of knowledge of the area and where to bill from.
And many times people will say, well I don’t do that area, I don’t do corporate tax. We only do individuals. That’s wonderful. But you need to have an understanding of how the corporate tax system works. In order to know on the individual side what the impact is. It’s odd when many people tell me they deal only with individuals, but that means every K-1 they received came from an S corp or an LLC, which means they do some kind of business tax, and need to understand it because it’s impacting their individual returns.
So, the trend is that we’re gonna see a lot more, or it appears to be we’re gonna be able to see a lot more small businesses, small proprietors because a lot more people are not gonna be in the large corporate entities anymore, they’re gonna be on their own, either semi-retired or having to start up and build their own businesses, because that’s the way to control their future, they say. And that occurring means that we’re gonna get a lot more involved in some of the early end planning from the CPA standpoint, the accountants. There’s a lot more of the early planning and what are we gonna do long-term and what’s the impact?
So, I mean if I look at trends going on now, that’s four trends that I see occurring that we’re seeing a lot more action on and we’re seeing a lot more integration from. We’re seeing a lot more – instead of on a rehash, we’re seeing a lot more on the international side where they’re going in and analyzing and doing audits and they’re starting to look very closely at transfer pricing and between the multiple countries putting together task forces to go look at and say wait a minute if you gave us what was the impact there, was it proper? But also, making sure that nothing falls through the cracks and doesn’t get taxed by one of countries
We’re seeing more on the state and gift because we’re seeing a lot more planning done on the individual state level. Then we’re seeing a lot more on the individual side or how do I plan because our rates are rising to a point where now people want to plan their way around that the next dollar does make a difference. And then the impact from that also is on the corporate side where we’re seeing a lot more saying, hey wait a minute. Maybe I need to cut my taxable income by using benefit plans for my owners or high wage earners as opposed to doing N&F because I want to use this lower rate and still get those benefits that I can pay from them that will then make my life or make the owner’s life a lot more enjoyable, in that sort of way. So, that’s the trends that I’ve seen out there. If you wanna go to the next slide and I’ll hand over the discussions to Michelle.
Michelle Yan: Thanks professor. So, for individuals who are looking at the application and looking to put their application for the MS in tax program, these are some of the things that you need to be aware of. In terms of the application requirements, we are looking for individuals coming in with an undergraduate degree from an accredited institution. We’re looking for an undergraduate GPA about 3.25 on a 4.0 scale. We’re also looking for an undergraduate or graduate tax course with a 3.0 GPA as well. And the program itself is catered again to working professionals. We are looking for a minimum of two years tax experience. And if you do hold the following credentials, like a JD, CPA, CFA or an enrolled agent, that’s going to be also very helpful.
The overall tuition cost of the program, you’ll see it’s about $1,385 per credit hour. There are a total of 30 credits and so total with tuition, you’re looking at about just over $41,000, closer to $42,000, including books. We do have upcoming start dates. Typically Northeastern, that online MST program we do have six start dates throughout the year. So, for some individuals who are currently in tax season right now, not to worry. We do certainly have start dates coming up after tax season. So, we went immediately after is April 21 and then we have a May 26 and then we also have two start dates for the fall.
Angela LaGamba: Thank you Michelle. The next section that we have here is our question and answer session. I wanted to thank our attendees. We have quite a few questions that have come in. Before we get started on that though, I have opened a poll on the lower right hand side of the screen, we’re looking for your input on what you thought of today’s webinar and future webinar topics. So, feel free to fill that in as you are listening to the Q&A session. And I also encourage you to continue to send in those questions. All right the first question that we have here is for Professor Gagnon. The question is what changes do you see occurring over the next five years in estate tax in your opinion?
Timothy Gagnon: First thing is it’s gonna be a lot more prevalent because a lot more people are gonna die, the older generation’s going on. We’re gonna see a lot more coming about, we’re dealing with a portability issue and how you can transfer them out and how does it work? We haven’t seen any clarity yet on regulations or any effect from court cases on the portability and moving it because right now it basically says it’s only for the last spouse you have, but what if your next to last spouse didn’t use their exemption, where will it go?
We’re also gonna see a lot more on the gifting side because with the larger estates we’re gonna see people saying, hey wait a minute, I don’t wanna die with as much, so let me gift away, and the interesting thing is the federal has gift tax many to states who do not have a gift tax system. So, gifts made don’t affect the state, therefore you’re lowering the number for the state purposes that you have on death and it may avoid tax because we’ve gifted away during your life.
If on the federal side, if I exceed my annual $14,000, I’m using up part of my 5.25 which means I still got plenty of room because I’ve got a $3 million estate. So, federally it won’t cost me anything, but if I get it out without a gift tax on the state side, I’ve now saved 16 cents on every dollar I got out that the state won’t get. Or if it’s a $600,000 exception or whatever. So, the states are gonna probably either have to come up with a gift tax system or we’re gonna have a large practice of trying to avoid the state tax by gifting away and not having to worry about the federal side. So, I think you’re gonna see a lot more discussions about that. I think you’re gonna see the state starting to look closer at that because when they used to be intertwined, when they used to be tagged to each other, whatever have their federal worked for them because that’s what it kept in line.
Now that they’re detached, they’re having to think about it themselves. So, we’re gonna see a lot more on the state level. And the fed I expect to see sort of it’s indexed for inflation, so it may hold sort of current and that’s my best guess. I wish my crystal ball would work better, but that’s about where I would guess it’s coming in. Hopefully, that helped.
Angela LaGamba: Thanks Professor Gagnon. And to our audience member if you had a follow up question to that, feel free to send it through the chat box. Moving on, Michelle, the next question that we have is for you.
The question is around the entry requirements. One of our audience members is close to retirement and was wondering if there were any waivers available for the entry requirements. Go ahead.
Michelle Yan: In regards to individual cases, I mean a lot of times any type of waiver transfer credits, especially, we’re looking for individuals if you’ve taken some graduate level tax courses from another program and are looking to transfer those in, that’s when we would consider transfer credits. Sort of more individual cases, depending on what your background is, I mean if you have a strong tax background and depending on what your GPA maybe if it’s slightly lower, we may still consider you depending on obviously that type of tax work you’ve done. But you’re more than welcome. We do have a number on the bottom. People like to contact me directly, we can have a more in depth conversation regarding your particular situation and I’ll be more than happy to answer any questions as well.
Angela LaGamba: Thank you Michelle. The next question that we have is for Professor Gagnon and the question is for those looking to move from another area of tax into corporate tax, how can they get started in making that career shift? Go ahead professor.
Timothy Gagnon: Well, there’s a challenge. I think for a large part from my standpoint when people have tried to move into, taking it more from my area trying to come from estate and gift, if you’re trying to move over to the corporate, it really is being able to show that you have a sound foundation in the corporate area, that you understand the fundamentals, you know how they work, you know what the effect is so that you, first off, when you try to move across and teach you the basics.
The other thing is to take and look at some of the more, I don’t wanna say obtuse, but the more specialized areas and becoming a lot more knowledgeable in that area because a lot of times when the employers or the practitioners are looking, they’re looking for somebody who has specialized knowledge in certain areas to fill in where they don’t have it. So, it may be somebody that’s really good at writs and knows how writs will run from a standpoint of a partnership or how the pastor will work or whether it goes to that. That specialized knowledge helps when they go looking because they’re going looking for somebody for that kind of knowledge, that kind of understanding because they need to fill that spot in their cadre because, unfortunately the way the world is going, not many of us can be true journalists to know everything about everything.
Everybody’s becoming very specialized, very structured so that it’s being highly knowledgeable in that one area because that’s what you’re selling. That’s really what they’re buying is okay we need a person who can do this, you can show that knowledge, you can show that education, you can show that understanding. That’s what they’re looking to apply. So, that would be how I would look at trying to change over is becoming a specialist or highly knowledgeable in a certain area of the spot that I’d like to work in. And that way, I get my advanced knowledge and I’m able, at the end of year to talk about it and in some cases, I’m able, if I get sort of the knowledge, I’m able to put on some articles or make some statements so that I somewhat good reputation in that area. And it’s very easy to do articles or do little publications about that even if it’s a blog on the area and sort of start to show an expertise. And that everybody would come to or at least talk about. That’d be my best way to go about.
Angela LaGamba: Thank you professor. The next question that we have is for Michelle and the question is one of our audience members has an undergraduate degree from outside the U.S., but an MBA from a U.S. institution. And the question is would they have to get their transcripts transcribed and also right the TOEFL? Go ahead Michelle.
Michelle Yan: Normally for individuals who have completed the bachelor’s degree outside the U.S., sometimes we will ask to see a credential evaluation. I mean, if you’ve done an MBA in the U.S., you’ve probably already done that. So, what we need to do is see a copy of it and take a look at the evaluation and if you have obviously a graduate level degree from the U.S. that does help. And a lot of this is conducted in English.
And if you’ve been working in the U.S. for quite some time in terms of verbal communication, in terms of written communication in English, then we should be okay without TOEFL.
Angela LaGamba: Thanks Michelle. The next question is for Professor Gagnon. The question is – what would you – one of our audience members really liked the section where you talked about your corporate tax. However, they were wondering if there was that they could go to since their area of expertise is not on the corporate side where they could see how to make a decision around the C or S corporation or the LLC? And wondering if you had any thoughts on that professor?
Timothy Gagnon: The choice of entity. A large part – if your firm or your company has CCH or RIA, which are two of the bigger tax databases, they’ve got checklists built in their system to allow you to analyze what the ramifications are. If not, I mean it’s a scary thing to say, but if you go out on the web, you’ll find different law firms and accounting firms that are starting to put things out under little articles or little blurbs or blogs as to how to do the analysis through and to look at them.
Oddly enough I’d also take the IRS publication on the corporate side and read through what it talks about from a C corp and an S corp and how they work and to look at what passes through and what doesn’t pass through. It’s an area that’s just starting to hit, so we’re gonna see more and more articles coming out about it, which means if you look at most of the trade publications, they’re gonna start to have articles about it because it’s just started to come about because of the change in rates. So, if you keep an eye on the different state societies, the different tax advisor, things like that, you’re gonna start to see articles discussing it because everybody’s now having to get their arms around the concept, how it works, where it works and if it works.
So, that might be way to try to figure it out. A true checklist, not that I haven’t seen it yet developed, but I won’t be surprised in the next three or four months they don’t start to appear, because usually they tend to show up a little after we see the changes and the people start to talk about the situation and they start to develop them.
Angela LaGamba: When was the online Masters of Science in taxation launched and are there any on campus requirements? Go ahead.
Michelle Yan: The online MST program has probably been around, I would say, coming up four years in March. And a lot of the program itself, the online program is based directly off on campus MS in tax program. I mean Professor Gagnon, he teaches both the on campus as well as the online programs. So, a lot of the faculty professors teaching the online program is very similar.
So actually there is no difference between the online as well as the on campus program. I know with the online program because I particularly advise on it, I mean the way the curriculum is it makes it very flexible for working tax professionals to be in the program because there are 10 courses, you’re only taking them one course at a time and each course is about five weeks. So, that’s sort of the structure of the curriculum.
But essentially, like I said, the coursework, the material you’re getting, the faculty members teaching the programs are exactly the same. So, there is no difference. We just have designed the online programs specifically to cater toward working tax professionals because we know you have full-time jobs and you have kids and a family and tax season. So, sometimes it might be a much more convenient to be able to learn online. Now, for example you put your kids to bed at eight in the evening, you can start doing some reading and doing some work starting at eight for a couple of hours. So, it’s more that convenience factor and providing also quite a bit of accommodation in tax season as well. Timothy Gagnon: And I’m gonna add, the second part of the question, we don’t currently have a residence requirement. We don’t have a requirement to come to campus at any point, although maybe we should. That way, we’d actually get to meet some of you. But, we don’t have that requirement, although we have seen a lot of our students when they’ve reached graduation coming in for graduation because I’ve met with many of the online students when they come for graduation and it’s sort of fun to catch up and sort of shoot pictures back and forth to actually – so we can find each other in the middle of graduation. Back to you Angela.
Angela LaGamba: This is all the time that we have for today. I wanted to thank Michelle and Professor Gagnon for taking the time to walk us through, especially the fascinating section around taxation trends. And also for our audience, thank you for spending the time today to talk to us about the online Masters of Science in Taxation and also to learn a little bit more about trends. This concludes our session and have a great day everyone.
In this student spotlight webinar, Michelle Tolin shares her thoughts on the Online Master of Science in Taxation program at Northeastern. She talks about characteristics of a successful candidate, the online learning environment, the real-world relevancy of the Online Master of Science in Taxation program, and more.
Good day everyone. Thank you for joining us for Northeastern University’s Student Spotlight webinar. My name is Evelyn and I will be your moderator for today. Before we begin, I would like to go over the logistics of this presentation. To cut down on background noise, you are in listen only mode. So, you can hear the presenters, but they cannot hear you. If you have any questions during the presentation, just type your question in the chat box in the right window of your screen and hit enter.
Please feel free to ask your questions as you think of them, but note that all answers will be held until the end of the presentation. As well, a recording of this session will be available on our website in the next few weeks.
The panelists for this webinar are, Michelle Tolin. Michelle is a senior tax analyst for Ethicon Endo-Surgery, Inc. a subsidiary of Johnson & Johnson, located in Cincinnati, Ohio. She has worked in the tax department for four years in federal, state, local, international provisions and most recently corporate tax planning. Michelle completed her undergraduate degree at Butler University and has completed nine of her 10 classes in the MST online program at Northeastern University.
Also we have Michelle Yan, an enrollment advisor, who answers your questions about the program, the admissions process and assists you in assembling your application package. In addition, myself, Evelyn, who will be your moderator for the webinar. Before we move into the student spotlight section, Michelle Yan would like to share some information with you about the online MST and the D’Amore-McKim School of Business. Michelle?
Thanks, Evelyn. So, our online MS and taxation program, it is specifically designed for the working tax professionals. It will not only help sharpen your tax knowledge and research skills, but also help you keep up the date with tax laws and regulations. On top of the expert faculty in the program, I think the maim feature and benefit of this particular program is that you have the opportunity to interact with fellow entry colleagues. We have a lot of students coming from a lot of public accounting firms, we work with private industry as well, the IRS very closely as well as a lot of the big four firms.
Can I get the next slide up? Thank you. Our MS and taxation program is part of the D’Amore-McKim School of Business. It was established in 1922 and has a rich history, a strong reputation for scholarly research and teaching excellence. We are accredited by AACSB International for the highest business accreditations worldwide. The main campus is located in Boston, Massachusetts. We also do have satellite campuses in Charlotte, North Carolina, and most recently in Seattle, Washington as well.
Building on high academic achievements, wide ranging work and consulting experience, rich diversity and our extensive corporate ties, D’Amore-McKim’s School of Business faculty members are leaders in their fields and regularly receive worldwide recognition and awards for their contribution to theory and the practice of management. We do have a global network of over 200,000 Northeastern alumni spanning more than 15 countries, like China, Canada, India, England and Russia, just to name a few. Almost 90% of our students pursuing graduate business degrees have work experience. So our programs are actually very accommodating and flexible to working professions. Thanks. I’m going to turn it back over to Evelyn now.
Thanks, Michelle. And now we’d like to conduct our first online poll. The first question is what concerns you most about starting an online program, unknowns about the online classroom environment and technology, finding the time balancing school with other obligations, if I have what it takes to succeed, whether I can afford it or qualify for financial aid, or other, please specify? A poll should have popped up on the right side of your screen. Please take a moment to select your answer and I will share the results with you in a few minutes.
We will now move into the student spotlight part of the webinar. Michelle, from your perspective, who is a good candidate for this program? How has your career and educational background made you a good fit for the program?
Thanks Evelyn. I would say from my perspective, anyone looking to pursue a long-term career in tax who has a basic foundation of tax knowledge is a great candidate. Additionally, someone who is self-motivated and dedicated. You do have to learn a lot on your own in the program in terms of you have to read the material, the teacher can’t do that for you. They can only provide you the tool. And the tools are there for you to learn. I had what I would consider minimal tax experience in comparison to some of the classmates that I’ve run into over the last nine classes that I’ve had. And I’ve been very successful in the program thus far, hence one more class to go. I will say that it does take sacrifice. You do have to – you know we’re gonna get into this a little later, but a good work-life balance and understanding how you can make it work for you.
I started in finance, so I had a good financial background. So, moving into tax for me a was a little bit of a struggle in terms of the research side. But you jump off the classes in a research class and it teaches you how to use RIA and CCH and different programs to research tax specific codes or cases. So, it’s been a great learning for me and something that I’ve actually been able to share with a lot of my co-workers and I think they’re quite jealous of the experience that I’ve had thus far.
Evelyn Liougas:Great, thank you. Next question. Michelle, from your point of view, what makes this program different from other taxation programs? And what made this program standout when you were choosing a school to pursue your degree?
The biggest thing that stood out to me with the Northeastern program was flexibility. It was quick and it was a top-ranked online program. I did look at two other programs when I was deciding to pursue my degree. One was here in Cincinnati and there was another one in Boston. But both were online, distance learning programs. Things that I looked for was how is this gonna fit into my schedule and some programs do have specific times you have to log onto classes and the classes are longer in length. Northeastern’s programs are five classes and then the test program are five weeks long, which for me was get in, learn the material and move on. And you crank for five weeks and then you get a break for a week. So, that was something that was really important to me.
And I think some of the other programs can be more restrictive. But it’s something that everyone needs to weigh the options in terms of works best for them and what they’re looking to get out of the program. I got the option to work with some really great tax professionals that were classmates of mine who worked in the big four firms or had IRS experience in some of the different states.
Additionally worked in the industry that actually I had some of the customers of Johnson & Johnson, vendors who supply us were some of my classmates. So, it was really interesting getting to get different perspectives from different people and different tax professionals view of tax and how they see it. And everyone is great in discussion boards on sharing their experience and I can’t say that other programs won’t offer that, but I can’t say that Northeastern’s will.
Evelyn Liougas:Thank you. Next question, Michelle, tell us about how you were able to balance school with all your other obligations.
Well, I’m not gonna tell anyone that it was easy. It was definitely hard. It takes a lot of discipline and sacrifice. I had to get my family on board that knowing that coming home and flipping on the TV wasn’t gonna be an option after work. I will tell you that in the last year – so, I started May 7, 2012. I have not taken a break in terms of I’ve taken a class every chance that I’ve had to take one. I’ve been on three week long vacations and I’ve been on six work trips in the last year.
And I’ll tell you the biggest thing for me was planning ahead. If I was traveling, I needed to know when was I gonna be in the air, when was assignments due, how much reading did I need to do before I left and while I was gone? What did I need to have with me. But I’ll tell you it does take discipline and sacrifice from that perspective.
Also have to know – work with your professors. I was traveling once and the time got me. When I was in California, I wasn’t used to that. And just letting them know, oh I’m traveling, I’m not – they’re great to work with, they understand. They understand that you’re working. I wouldn’t use that excuse very often, but you have to own your work and your life balance and your school balance.
I will give an example. One of the things that I tried to do was if I knew I was gonna have a really busy week at home, I would try to schedule time when I was at work, like an hour over my lunch break to read, or stay a little later at work and read at work before I went home so I wasn’t distracted by snacks and laundry and everything else that gets in the way of life.
So, those are just some of the things that I had to work on. But there are definitely other ways and I know other students in the class had other experiences. I will say I had to sacrifice a lot of things with family events and hanging out with friends and social events, because the weekends, when you have finals and mid-terms you have to study and you still have to learn that week’s material and take a final and a mid-term. It’s very doable though.
Evelyn Liougas:Great, we just have a question. We typically hold them ‘til the end, but it applies to what you said here, so I’ll ask it now. What is the average study time that you devoted each week?
I would say roughly 15-20 hours. But I would caveat that with saying it depends on how well you know the material. So, for me, that varied from class to class. And my corporations class, working in corporate tax, I had more knowledge of what was going on versus a gift and estate tax where I had zero knowledge going into the class of gift and estate and you have to work a little harder. So, based on where your knowledge is, that’ll determine how much study time, as well as how fast of a reader you are. There is a lot of material to read.
Depending upon the class, gosh, I read more books in this MST program than I think I’ve read in the last two years, or last five years, since college kind of thing. It’s a lot, so I would say you need to be prepared for a lot of reading. The material is good, but the professors choose very relevant books and relevant material to teach the material. But I will say, it does depend on how quickly you absorb. And you know there are topics I had to read twice. So, that would expand the amount of time I had to study.
Evelyn Liougas:Okay, moving on to the next question. Michelle, how does student and faculty interaction occur in the online courses? What was it like overall to learn online?
Well, the student and faculty interaction occurred in one main way – I’ll say two main ways. There are discussions that are weekly, and you have an instructor discussion weekly and you’ll have a professor discussion weekly. The professor discussion is with a tax professional essentially who is the professor for the class. Your instructor is typically – I don’t wanna equate them to a teaching assistant, but they’re the person who is grading the material, but they are also a tax professional and they are there to answer questions, technical questions, any technical question that the instructor cannot answer, they will facilitate reaching out to the professor. All of the professors that I had were always an email away if I ever needed anything.
But, one of the great things is in the discussions on the weekly chats, so you log into a webinar, similar to how we are today and you have a chat. And you can use a web cam, you can use a head piece to speak out loud, or you can simply just chat on your computer. And it’s a great way to learn about personal experiences that the professors have had. They talk about real life cases that they’ve been involved in. They talk about real-life experiences with clients that they’ve had or consulting engagements they’ve been involved in that’s relevant to the material that you’re working on.
Each professor approaches the chat differently. Some professors will present material in the chat, and some will use it more as an opportunity to have a discussion with the students. So, you do have to always log into the first one to kind of find out what their chats are gonna be about. But it was a great opportunity to share my experiences online and some of the things that I was working in, even the things that I got to work on that professors hadn’t worked on. So, you can teach the professors and the professor can still teach you.
I will tell you learning online is, it’s a lot of material and it’s very quickly. And I alluded to the reading. Some of the books that you’ll receive in the mail are quite large and there are some of them that you’ll get all the way through the book. It’s great because you are learning so much material and I think I said this earlier, I have co-workers here in Cincinnati who work in tax and have worked in tax for 20 years. And some of the things that I’m learning in class I’m teaching them because they haven’t learned it in their 20 years of experience. And they’re jealous of the case knowledge that I have now and I can rattle off a case or rattle off a code section that is relevant to something we’re working on. So, that’s been probably the most uplifting experience for me to have very little tax experience, but now I have a lot of tax knowledge to back it up.
So learning online is great. I always assumed that I would go to an on ground program if I went back to school. But unfortunately here in Cincinnati, an on ground program was not available to me. So, I did have to look online, and this has always been the best decision that I’ve made for my career, because I now know that I won’t have a feeling that’s gonna keep me from going where I wanna go next.
Evelyn Liougas:Great. Thank you, final question for you Michelle, how relevant is this program? I suppose you’ve answered this a little bit, but if you could expand a little bit more, how relevant is this program to your career path and goal?
so, I did mention it a little, but I would say it’s extremely relevant. I had touched on some of these subjects in terms of corporate tax, but in my corporation, there are some things that I’ll never deal with because my corporation doesn’t buy and sell commodities or do certain things. And when you get into your master’s of tax, you’re gonna learn about a lot of different other specialties that I didn’t even know were out there. And a lot of different credits and deductions and taxes that are out there that you get more knowledge on. And it just expounds anything that you wanna do.
I feel like I could leave my job today and I could go anywhere. I could go into the public sector and be successful. I could go to another industry and be successful because I have a good base knowledge of anything that I could see out there. I will say, you’re not gonna know everything 100% by the end of the program, but at least I know where to go look to find more information and I have a good starting point. And I think that’s the biggest thing that the program gives you.
I don’t ever expect that I’m going to be a specialist in gift and estate tax, for example. But I at least know how I wanna plan mine in the future. I now know how if I – when I have enough money to gift to other people how I would go about doing that. And I can actually advise people around me. I now feel like I can answer questions from other people and I’m sure many of you guys have had this experience if you’re in tax and you work in industry and people in the finance organization walk over and say, well I was doing my personal taxes the other day and I have this question.
And I know a couple of them and can answer them off hand now, but the first thing I do is I go out and I research it and I know exactly how to research it and I can get them some good articles and some good information to get them started or to take to their tax accountant and say, hey I have this information, can you tell me more about it?
But I did mention, in answering the last question, I feel like with an MST, there isn’t a limit to where I can go now, especially working in the industry that I work in right now, in corporate tax, having a master’s for me, allows me to move to the next level or two levels above that if I want. I don’t feel like someone will look at my credentials and say, well she doesn’t have enough experience, because now I have the experience and I have the technical background to back it up.
So I really feel like Northeastern has kicked me off on the right foot in terms of tax. I think we started off by saying – I was a finance major, so coming into a tax, technical master’s program was extremely intimidating to me. And trust me, if I can get through this program and learn this material, I think really anyone who has a good tax foundation can do it also.
Evelyn Liougas:Great, thank you. We do have one question. Has anyone ever applied or have you ever applied the hours of completed credit to meeting continuing ed requirements for certified or designated focus?
I have not, but that is a good question that – I certainly think you could, but you would have to follow up, I think, with someone more knowledgeable on that subject.
Evelyn Liougas:Okay, great. So, we will now move back to Michelle, our enrollment advisor who would like to talk about the application requirements for the MST.
Thanks Evelyn. So, the application checklists, these are some of the requirements of what we initially will evaluate students on. So, first of all, you need to have an undergraduate degree from an accredited institution. Undergraduate GPA we are looking for is about a 3.2 out of a 4.0 scale. We are looking for a minimum of two years of tax experience, including one busy season or holding the following credentials such as a J.D., CPA, CST or an enrolled agent. And as you see on the right hand side, the upcoming start dates for 2013, we actually have two more coming up, one in August, August 19th and the other one is September 30th.
In terms of financial aid information, Northeastern’s MS and taxation program, we do qualify for financial aid. And a lot of times I would suggest students to apply to something called graduated Stafford loans if you are interested. I believe graduate Stafford loans will offer up to a maximum of about $20,500 per year as a loan. But again, for more information, definitely speak with your advisor. And we can also give you links to the financial office so you can ask them directly for your specific information questions as well.
Evelyn Liougas:Thank you Michelle. Before we move into our Q&A session, we would like to conduct one final poll. The question is what types of webinars would you be interested in attending in the future: (a) program information; (b) application process; (c) student or alumni spotlights; (d) faculty spotlight; or other, please specify. A poll should have popped up on the right side of your screen. Please take a moment to select your answer and I will share the results with you in a few minutes.
We would also like to let you know that in addition to the MST that the D’Amore-McKim School of Business also offers the following online programs: an MBA with a specializations, the master of science and finance, of course the master of science and taxation and recently we’ve added a graduated certificate in supply chain management.
We would now like to begin the question and answer period. Just as a quick reminder, if you have any questions, simply type in your question in the chat box on the right hand corner of your screen. So, first question is for Michelle T. Are costs of books included in the tuition?
They are not. They are separate.
Could you tell us on average, what the cost would be per course?
About average it’s gonna range between $150-$300. You can buy a lot of books on Amazon. I’ll plug for them because you can get used books there. But, a lot of the books are casebooks, so they tend to be a little more expensive. But that’s just a range. I had one class that was a little more expensive, but typically, I’d say $150-$250-$300 would be the max. But probably close to the $150-$200 range if you use Amazon and buy used.
Evelyn Liougas:Next question is for Michelle Y. I have 28 years of experience in tax. So, how important is my undergraduate GPA for admissions into this program? And sorry, here’s an addition. This person is also a CPA and a partner in a public accounting firm.
Okay, fantastic. I mean the guidelines on the generic minimum requirements is basically a guideline. We do look at students on an overall basis. So, we will evaluate based on the type of designation that you have, the type of tax work experience that you have as well. So, I’ve had students come to me and said, well the last time I went back to school or my undergraduate degree was quite some time ago and I may not necessarily meet the 3.25. Is there something that can compensate in terms of my work experience and so forth?
And like I said, we do definitely do look at that as an overall. But for more information, you definitely can speak with an advisor. But like I said, we do look at students with a _______ background. I think that’s something that we’re more so considering, if you have a strong tax background coming in, we definitely will consider you as well.
Evelyn Liougas:Great, thank you. Also for you, Michelle Y, what is the cost of the program?
The total cost of the program is $1,385 per credit hour. Altogether there’s about 30 credits. So overall tuition, you’re looking at about $41,550. Like Michelle Tolin said, in terms of textbooks, I would allocate another $150-$200 on top of the tuition costs. And that will give you the total amount in terms of what you’re looking for. So, about $1,385 a credit hour.
Evelyn Liougas:Great, thank you. For Michelle T, are there group projects? If so, how do I communicate with others in my class?
There is one group project that I can specifically think of and it is via email. It’s specifically in the individual taxation course. And you actually have a couple group assignments in that course and you’re assigned to a group, so it’s very easy. And my group used – I used my conference call number and we had conference calls and chatted. Using Blackboard it’s kind of hard to explain, but I don’t know how many people are familiar with Blackboard, but Blackboard is the basis that Northeastern uses to facilitate the classes. And there are discussion boards for each of the groups working together when you have a group project. So, you can post all your discussions, you can email with your classmates. We email files around, we use Google Docs. So, there are a lot of ways to facilitate working together.
Evelyn Liougas:Great, thank you. This is for either – I’ll go with Michelle T. Do I ever have to come to campus?
No you do not unless you wanna walk for graduation.
Evelyn Liougas:Okay, great. Next question also for you Michelle T. How do I turn in my assignments?
It’s all done electronically via Blackboard. There are electronic dropboxes where you upload your assignments. It’s very easy and once you upload an assignment, you get an email confirmation that your assignment was uploaded. You can actually see the document before it uploads, so you can ensure that the correct use – you selected your corrected latest version that you wanted to.
I will tell you I have, on occasion, and it happened to me, actually in my last class, where I uploaded not the latest version and just simply emailed my professor and attached the document and said, review this one instead. I just missed attaching it. Because once you upload a document, you cannot upload a new document in its place.
Most of the assignments are also done via a discussion board, which works similar to a blog where the professors will post questions for the week and give you certain dates on which you need to respond to the question by, and then post questions to your other classmates by. So, to give an example, Monday for all classes is day one. Wednesday is day three and Friday becomes day five. Teachers would typically ask you to have a discussion board post by day three and a response to classmates by day five.
And some professors have you do two discussion boards in a week, so you just have to be aware of which ones you should be posting to, but they’re all posted out there. Some of the professors get very engaged in the discussion boards and will actually post questions to the students and comment on the material that’s being brought up to ensure that the discussion goes in the right direction.
Evelyn Liougas:Great, thank you. Michelle Y, once you begin the MST program, do you have to graduate within a specified period of time? Is it possible to take only one course per semester or take a semester off?
That’s a very good question actually. I’ve often encountered these type of questions, especially if you are going into tax season as most tax professionals do, whether being the beginning of the year aiming for your 4/15 or your 8/15, 9/15, 10/15. So, yes. Even though the program itself is about 16 months in timeframe, as Michelle Tolin mentioned, she did take one course at a time and she’s going straight through. But if you feel that times are hectic, if you’re running into your busy season, you feel that, things are just hectic, there’s no way I can take any courses during that time, we do allow for breaks during that time.
So some students will say, well, you know, I have two months where tax season is very busy, am I able to take time off? Absolutely. So, we certainly accommodate for that. One you’re in the program, you will be working very closely with our student services department. And so as long as you speak to them, let them know your schedule, the courses that you need to miss, they’ll ensure that as those courses swing back around the curriculum, they’ll just help you pick it back up again.
So, again we do accommodate for time that you need breaks. Like I said, this particular program, we are designed specifically towards working tax professionals. So, we understand the flexibility you need. We understand your busy season. So, we’re very good at working with you to accommodate that schedule for you.
Evelyn Liougas:Great, thank you. It’s probably for both, but I’ll start with Michelle Y. During the classes, are students allowed to pick subject areas that relate to specific areas of interest, such as GST or gift estate for projects?
This MST programming, you do start off with your core courses first. You typically will start off with two pre-requisite courses and it’s either going to be federal tax issues or tax research. And then there are core courses that you have to go through, and one of them is estate and gift. There’s corporations, there’s partnerships. And then once you move on elective section, you actually do have an opportunity at that point to choose the courses you would like to take. Specifically when we have two tracks, we have a taxation entity track, as well as a taxation individual track. So, depending on the track you’re more interested in, you could certainly specialize. But I’ve also had students come up to me and say, well I think that there are courses in both of the tracks that I’m interested in taking. Am I able to mix and match? And absolutely, you can do that as well.
Evelyn Liougas:Anything to add Michelle Tolin?
No, I completely agree.
Evelyn Liougas:Next question is how – oh this is for you Michelle Y, how quickly from applying will an acceptance decision be made, and when can we start the program?
We have rolling starts. I mean typically every year, we have about six start dates throughout the year. Like I said, at this point, there’s two remaining starts and it’s up on the screen right now. Upcoming start dates are August 19th as well as September 30th. We are still collecting applications for these two starts. I mean if you want to get in for August 19th, for example, all documentation needs to come in to us by end of this month, so July. So you have about 2 ½, three weeks left. It can be done.
The turnaround time is actually fairly quick. Once you put through an application, all your documents are submitted, you can usually hear back from the admissions committee within a 2-3, even three week timeframe I would say. But like I said, if students are interested in pursuing any of the start dates coming up this year, the two start dates up on your screen right now, we actually do take applications at this point. And you can feel free to contact your advisor to put together an application.
Evelyn Liougas:Great. Next question is for Michelle T. How many people will there be in my class?
Roughly 7-12 I would say in your class. So, you do get a lot of personal attention in terms of there are – the class numbers are very small. I think most classes, the max number that they take is 20 for the online program. But, I have not been in a class that’s been that large yet.
Evelyn Liougas:Just a follow up question. Do you go through the program with the same group of people?
No. Because there are rolling start dates, there will be a couple people that you’ll see pop up in each of your classes. But no one person, probably, will have the same person in every single class. So, you do get a lot of different people. And as Michelle Y alluded to, some people do take breaks and choose to take their courses in a different order. So, it varies what people are deciding to take, especially when you get to the core classes. The core classes you’ll see a lot of the same people and then when you get to your electives portion, you’ll see varied people popping in and out.
Evelyn Liougas:Great. I think we may have addressed this, but just if we can reiterate, Michelle Y, how long is each course and term?
So, the program itself is about 16 months. There are 10 courses involved. You take the courses one course at a time and each course is about five weeks. So, it is considered an accelerated program. It’s about five weeks. But like I said because you’re only taking the one course at a time, we really do focus you on that one course and hopefully wont’ spread yourself too thin so that you can balance your school and work and also, I do have a lot of students coming to the program with family and kids and whatnot. So, just to give you a good balance that way.
Michelle T, are there tests involved and how are they facilitated?
There are tests. Depending upon the class that you’re in, there can be a mid-term and a final, or just a final. They are all administered online. Some of them are downloaded exam where the Blackboard records the time that you download the exam. They are all timed. Most of them, I would say are open book. A couple of them are not open book and the exam is too quick for it to be open book. You wouldn’t have time if you didn’t know the material to make it open book to look things up.
So, there are a couple classes based on the material that there are not finals and mid-terms and that’s just because the way the material is presented, I can give a good example, state a local. It would be very difficult to test everyone on state and local taxation. So, there are more writing assignments, and it’s a very heavily, writing and discussion board based class. And then other classes are spread between papers, discussion boards and exams.
But you would never have more than two exams, mid-terms always fall on the third week of the class and finals always fall on the last week of the class. They open on Friday at midnight, or Friday at 12:00 in the morning, I guess. And they’re open to 3:00 a.m. Monday morning. The program does allow for students that are across time zones to equalize. So, assignments are typically due at 3:00 a.m. the day after. So, if it’s due on day 7, it’s actually do Monday at 3:00 a.m. is the latest you can submit something. If you need more clarification, just let me know.
Great, thank you. Michelle Y, what accreditations does the school have?
The accreditation, we are regionally accredited and we are also, like I mentioned before, AACSB accredited, which is one of the highest business accreditations worldwide. So, we have ________ accreditation. It’s the same accreditation that we do have on campus with the university, as well as the D’Amore-McKim School of Business on campus as well. So, those are the online MST as well as the on campus MST as accredited by the same accreditation board.
Evelyn Liougas:Thank you. So, we have time for another couple of questions. Next one is for I guess Michelle T. Do you require any special technology to access the program?
No, I think Internet Explorer or some sort of internet – anything equivalent to Internet Explorer would work and Google runs on that. Java is also needed, but when you sign up for the program and enroll in your first class, all of the information – student services is great, they get you set up. They help you understand Blackboard, and then Blackboard has an entire support system. So, if you’re having any IT issues.
The only thing that I would suggest is I did buy a headset for calling into chats because my computer does not have a microphone. But I could have used a different computer, so depending upon the computer that you have, you know, if you have a Mac, then you have a webcam and a microphone in the computer, but my work computer is the computer that I default to using. So, it really is dependent upon what you had access to. But if you have a computer, then you can do it. You don’t have to have a webcam, and you don’t have to have a headset. That’s not a requirement of the program at this time. And I will say some teachers are just better about using the webcam and the chat function and it makes it a little easier to interact.
Evelyn Liougas:Final question is for Michelle Y. Can I come to campus if I choose, or could I take a course on campus of I choose?
Typically if students start online – I mean there is a way to come on campus if you decide that, well I tried the online course and maybe I don’t wanna push through online, but the requirements for the on campus program is a little bit different. They require a GMAT no matter what. So, that’s something to consider. But say if you started the online program, you have no issues taking a GMAT and you decided you wanna come to campus, you are able to do so, but you can’t switch back. Because even though the courses and the curriculum are the same, the timing is a little bit different, whereas the online program, we go about five week per course, and the on campus program is a little bit different in terms of their schedule. Same thing if you start on campus and you wanna come online, you are able to do so, but you wouldn’t be able to switch back.
Great, thanks. Just some closing remarks before we end this webinar. An enrollment advisor will be following up with you over the next few days to answer any questions we were not able to answer. If you would like to contact an advisor immediately, you may reach them by calling the number on the screen. Thanks everyone and this concludes our webinar. Have a great day.
[End of Audio]
This webinar features Professor Gagnon, faculty director of the Online Master of Science in Taxation program, providing an overview of Northeastern University’s Online Taxation program and his professional background. As the webinar progresses, Professor Gagnon discusses how he teaches improved research methods, real-world application of new knowledge, and where the draw the line to avoid legal issues.
Evelyn Liougas: Thank you for joining us for Northeastern University’s Master of Science and Taxation Faculty Spotlight webinar. My name is Evelyn and I will be your moderator for today. Before we begin I would like to go over the logistics of this presentation and address some common questions. To cut down on background noise you are in listen-only mode. So you can hear the presenter but they cannot hear you.
If you have any questions during the presentation, just type your question in the chat box in the right window of your screen and hit enter. Please feel free to ask you questions as you think of them, but note that all answers will be held until the end of the presentation. As well, a question that is commonly asked is if this presentation will be available online for review. Within the next few weeks you will receive an email letting you know when the recording is available on our website.
The panelists for this webinar will be Timothy Gagnon, Faculty Director of the online MST program, Michelle Yan, enrollment advisor, and myself, Evelyn, who will be your moderator. Professor Gagnon, I’m sure the attendees of today’s webinar are interested to learn more about your background. Can you please tell us a bit about your educational background?
Evelyn Liougas: Can you tell us how long you’ve been with Northeastern?
Tim Gagnon: Sure. I’ve been with Northeastern full-time about six years. I was on the adjunct faculty for about ten years prior to that, and prior to that I would have been on – I hate to say the competitors’ names, but I was on five other faculties. I started my teaching career about 1988 as an adjunct while still in full practice on the public side, and even while an attorney in private practice. I was on the adjunct faculties for five different universities and finally came to the Northeastern adjunct faculty and found it to be the more exciting but also the better students and a lot more suited to understanding my style because I have a lot more of a practical nature to it.
And then six years ago they asked me if I wanted to suspend my practice and actually join on a full-time basis, which I have to admit, I was craving to do and was the point I wanted to be in the long run. And then when they decided to create the online program I was asked to be a faculty director, to basically put the program together and to administer it on an ongoing basis. Luckily I don’t do the admission side, I don’t do the administration side. I just deal with the faculty and the course content.
Evelyn Liougas: Perfect, thank you. Tell us one thing, and one thing only, that you personally like about Northeastern. I think you kind of touched on that but I’ll ask you again.
Tim Gagnon: I find that one of the greatest things I find about either the students and the professors is that we have a lot of practical knowledge coming in; it’s not all theory. We’re not purely, okay, here’s the code, here’s the sections, go read them or go deal with them. I mean, myself, I cannot cite code. I prefer if you give examples or experiences that apply it because we really do get a lot more of the students who are more practical. We get – most of my faculty is more practical. So we’re more of a hands-on. It’s wonderful what the code says but here’s how it really works and here’s the situations we’ve run into. And I find that’s probably the greatest thing about the degree and the interaction going through it, is a lot of the hands-on knowledge that comes from the professors and from the students in many cases because a lot of our students have a lot of experience, so you get a lot of good interplay.
And that for me creates a better learning environment than just a straight read the code, memorize the code, tell me what the code says. But really where does it apply? What does it do? How does it work? What are
you going to remember? That’s the part of Northeastern I find the most fun and the most challenging because you never know what situations going to come up during the class that we can all get together and figure out the answer. We’ll find the answer in the end but we all get to sort of put our heads together. And I know in a lot of our courses we try to have some group work involved so that you get to have an interplay between the students and the instructors so that you can try to work out the questions, not here’s the answer, but how do you get there? And that for me is a very important part of the learning experience from a Northeastern standpoint.
Evelyn Liougas: Great, thank you so much. Before I turn it over to the Professor, Michelle would like to share some information with you about Northeastern University’s D’Amore-McKim School of Business. Michelle?
Michelle Yan: Thanks, Evelyn. Hello, everyone, and thank you again for joining our webinar today. I do see some familiar names on our attendees list, so I’m very happy to see that. I think I’ve spoken with a couple of you already and will be speaking with you shortly after this webinar in the next coming week.
But our MS in Taxation program is part of the D’Amore-McKim School of Business. It was established in 1922 and has a very rich history, a strong reputation for scholarly research, and teaching excellence. We are accredited by AACSB International and one of the highest business accreditations worldwide. The main campus itself is located in Boston, Massachusetts. We also have satellite campuses in Charlotte, North Carolina and recently we’ve opened up one in Seattle, Washington as well. So we’re on the west coast as well.
Building on high academic achievement, wide range in work and consulting experiences, rich diversity and our extensive corporate ties, D’Amore-McKim School of Business faculty members are leaders in their fields. They regularly receive worldwide recognition and awards for their contributions to both theory as well as practice of management. We do have a global network of over 200,000 Northeastern alumni spanning more than 15 countries, such as China, Canada, India, England, Russia, and Australia, just to name a few, and almost 90 percent of our students pursuing graduate business degrees have work experience, so our programs are very accommodating and flexible to working professionals. I’m going to turn it back over to Evelyn. Thanks, Evelyn.
Evelyn Liougas: Sure, thank you. And now we’d like to conduct our first online poll. The first question is what concerns you most about starting an online program? A. Unknowns about the online classroom environment and technology. Finding the time balancing school with other obligations. Having what it takes to succeed. Whether I can afford it or qualify for aid, or other, please specify. A poll should have popped up on the right side of your screen. Please take a moment to select your answers. I will share the results with you in a few minutes. I would like to now turn it over to the Professor to talk about his background and the program. Professor?
Tim Gagnon: Thank you, Evelyn. Let me take this back because I said that during all that time I practiced for about 15 years in public accounting before I joined the dark side and went on to go and get my law degree, and at that point move across into dealing with law from that standpoint. But I’ve always been – and I hate to admit it – but I’ve always been a tax person and never really been an audit person. So I almost could have stayed in there. All the time I was in public accounting and in private, I was doing tax work either between a bank or in public accounting for multiple businesses and high network individuals.
When I left public accounting to go to law school, coming out of there I joined different law firms and created my own law firm, but I was always dealing with tax, estates, gifts, always on that side of the desk. So I have a strong affinity for the tax and how it applies but not much audit experience. But I find as a tax person that having done – or been forced to do some audit, it helps considerably because it does help us know better how to find the information that the auditors put together.
For the last six years, as I said, I’d been a full-time practice but prior to that I started two different law firms that both basically specialized in estate, gift, and tax, and at one time was part of two major law firms. But still on the business side it was a concentration on businesses and their trying to do succession planning, estate and gift planning, business planning, in order to try and wrap it all together. So I’ve sort of been on this side of the desk close to 30 years now. I’d love to see – I’ve seen it all, but I’m always looking for new opportunities to see some more, to find out some more.
And that sort of ties into how the program is arranged. The program is the designed for the working professional. We put a minimum requirement coming into the program that you’ve got to have worked through a busy season. You must have had some time in tax because we really don’t spend the early part of the program trying to explain what tax is. We’re trying to jump off and say, okay, you already know about tax, how do we expand your knowledge from there because we’re geared – the practitioner we’re geared to the long-term.
We’re trying to take the knowledge you have, expand it to make you a better tax practitioner, but also in many ways to expose you to a lot of different areas that will help you be a better advisor to the client, so that the client is multiple individuals, multiple businesses, or just your employer itself. But how can you better advise on issues from a tax standpoint and have sort of a breadth of enough knowledge to know that you’ve seen something and we should be concerned never going to make everybody a true expert in every area of tax law because that would be impossible. It’s just so overwhelming. But you get the exposure you need to move forward and be able to do more.
But to take part of that, we said, okay, we have 15 courses in the program. There are only ten that you have to take. You have to take ten of the 15, five core courses, and then five electives. Now, we even broke this down into two tracks for you. One is what we call the entity track, and the other is for the individual track. You’re not required, though, in your electives to only take the entity track or only take the individual track. You can take any five of the ten elective courses and that’s fine. But what we try to do really is just try to give you some concentration. If you’re going to do the entity track to pick up state and local, advanced partnerships, S-corps, those types of things, even accounting for income taxes.
If you’re going to go the individual track, we’ll give you more opportunity to get more in state and gift, advanced state and gift to retirement planning. Those ventures that tend to be more on the individual side or the individual advising standpoint.
Our faculty is comprised of three full-time professors, who teach here at Northeastern in our day program also, and we have approximately ten adjuncts, and all of our adjuncts basically work in the area that they’re teaching in. They range from lawyers to CPAs to writers for. All of them, though, concentrate in the area that they’re teaching for us. We really made a large effort to find tax people who really were interested in teaching but also had a lot of experience that you could fall back on, that you could take advantage of. You could learn practical knowledge, which we find highly important from a teaching standpoint. I worked very diligently to try and make sure we had people who do this work, who understand this work, and who are very good at it and very willing to take questions, to try to give you directions, to try to give you a point to go forward to. The program really is designed to do that for you.
We’re trying to sharpen your skills as we put on the slide. We’re going to give you complex problems and then a way to figure them out. But we’re also trying to say here’s the basic knowledge but how do we expand it is one of the hardest parts all of you are aware in the tax areas. How do you stay ahead of the game? How do you try and figure out what’s going to go down the road. I know in a couple of my courses I spent my fifth week primarily trying to deal with what are the things that we hear about on the horizon. What have we seen that’s coming down or what’s the impact? What’s the effect? What do we think will or won’t? How will it impact us long-term, and where do we see it all going to?
I have to admit, the students sometimes can bring in some very intriguing questions and ideas that we can basically ferret out in our discussions because as you may or may not be aware, the program is totally an online program, but it does mirror totally our ground program. So it’s the same courses, same structure, but we run it in a five-week setup. That’s five weeks. I will admit it’s intense. It’s got a lot of work in it but it has a steady flow to it.
But by the fifth week you really have gained a considerable amount of knowledge, a certain amount of ability to work with the subject. So you really do find that you’re a lot further along than you thought when you started the five weeks and that you’ve gathered a lot of information that you may or may not have thought you would have gathered at the time. Evelyn, are there things that you’d like to me expand upon?
Evelyn Liougas: I think we can move on to the specific course if you can give us an idea of what a course looks like?
Tim Gagnon: Sure. You have here one of the greatest courses ever created; just kidding. It’s my course. When starting the program there are two required courses that you must take first. One is our federal tax and the other is a research practice and ethics class. And the reason we have this in the early part is in doing the online and then doing tax, one of the critical things is you must be able to do a lot of tax research, and we find that the students coming to the program have a varying degree of research they do or have done. So we primarily take a step back and say, okay, let’s start from that. As part of that we have RIA available to everybody through the Northeastern library website. So you can do your research from RIA if you don’t have it at your office or don’t have access to it, we have it at the library for your use. All you have to have is your student ID number.
Part of the course is really designed to say, okay, how do I get your research skills up? The only way I can do that is if I have you do small exercises that work you through the different parts of the tax code, the course, the cases, the regulations, the periodicals, the primary, the secondary sources, how do I get you through that? So we do a lot of practical exercises. We really are looking to make sure that you get to touch the full realm of tax law out there and understand what’s controlling and what’s not controlling if you deal with the IRS. What’s controlling and not controlling when you’re working and worried about should I put you 30 or malpractice, just what can you hang your hat on and how do you make sure it’s the latest and greatest information so you’re up to date on any decisions or any consulting that you do; that you give good advice.
From there we take the course and say, okay, now we’ve figured out where all this law came from. Now we need to figure out how to use it and interact with the big dog in the room, the IRS. But we’re only going to say, okay, here’s what your responsibilities are if you’re advising, if you’re doing a negotiation, if you’re representing somebody on an audit, here’s what you’re responsibilities are. Here’s what you’ll end up dealing with, here’s the different levels, here’s the filing requirements, how do you appeal, what are the civil, criminal statutes, how do asset it, how to approach an assessment.
I’ve kind of given you sort of a road map. Okay, here’s how you go through an audit. Here’s how you go through a representation. Here’s what we can get you to go and get comfortable knowing what’s going forward. But on the second part of that we also have to take and sort of have you look at circular 230, look at your professional standards to know how far can you go and stay in the ethics range.
We all look black and white’s the easy one when you’re dealing with an issue in tax, but unfortunately most of the issues that they ask us about are never the black and white ones, those are the easy ones. They’re going to ask us about the gray areas. So what are your obligations when you’re in the gray areas? What are your obligations when you’re representing something in the gray area? How do you back it up? How do you put it together so that you’re protected, the client’s protected and you haven’t gone off on a limb so that you’ll end up with a circular 230 complaint or you end up with a complaint in front of a state board because that’s the last thing you want to do.
So just what can you do, how do you do it, how far do you go, how do you back up, how do you support when giving the advice, and when you’re giving the IRS information? And, again, what also can you or can you not do before the IRS in representation of your client because there are limits to what you’re allowed to do, what you’re allowed to say. I try in the course also to bring in for you that we’re in a Masters in Accounting and with students for a CPA or equivalent but there are certain things that you can do in representing going forward and there are certain things that you want to back up on and let the attorneys have it because of certain obligations. There can be certain things they can get away with. The easiest one is the whole client privilege question and where client privilege is and how it works and who has it, who doesn’t have it, who controls it? And that sometimes is a decision you have to make from a CPA standpoint of when do you let go and let the attorneys carry the case forward as opposed to you. And if it’s going to go to full tax court, run it through the attorneys as quick as you can and then run away, just kidding.
But, I mean, it’s understanding how that interaction goes forward. Where are your limits, where are you boundaries, how do you stay within proper authorized track – how do you stay in the right realm of practice? So that you stay out of business whereas there’s one thing I saw just the other day said how do you make money and stay out of jail if you’re practicing in the tax area? And that may be a good way to look at it. How do I make money at this because I’m doing good representation but I stay out of jail? And this course is designed to say, okay, how do you build your research? How do you use that in practice? How do you stay ethical? How do you get your support? How do you make sure you’re protected as well as the client?
Other things like that. The courses will go from there. We start at that apex. You’ll also find that the research course is helpful because if you’re doing this online, quite often you have to look something up yourself. By taking the research course, when you get into your upper level courses, which in many cases will have papers or projects that are due, but also it’ll give you the ability to be able to research group questions you have in the course that you’re going through and sort of give yourself some help because there’s so much information out there that you want to take advantage of. Over to you, Evelyn.
Evelyn Liougas: Professor, if you could just tell us a little bit about the types of careers that you’ve seen graduates move into after completing the program.
Tim Gagnon: Sure. To date I’ve got graduates going into everything from consulting. We have a lot of them that are in the financial planning, but there are also a lot of them that are in the corporate planning side. So if you do planning as well as we get the auditors, but a lot of the auditors are medium size firms. We’ll also do some tax work, but they’ll be in estate.
I have a few graduates who have CPAs and the knowledge that they now have work a lot with tax attorneys, working for the law firms, doing a lot of the workup for the lawyers on tax cases, but also working for a lot of the law firms handling trust and estate income taxes because on certain regions the law firms have large estate practices that handle a lot of estates and a lot of trusts and they go to do the tax work for them and help them with the advising.
We also see them in about all the different realms of corporate and private practice because, let’s face it, just about every business out there has some tax limitations and has some tax questions. So we’re saying them going into public, working for the accounting firms. We’re seeing on the private side working for all the corporations, but we’re also seeing them on the consulting side working for the consultants, working for the law firms. I have a few students currently who sort of spin in that they’re financial planning firms but they primarily do the tax work for all of the planning clients. So they don’t do any of the advising for what to invest in and how to invest, that’s not their realm. They’re not license people, but the large financial planning practices have very large tax bases that they work from and they basically spend their time doing the tax work for the client. And you’re all going to say, well, that means they do a bunch of 1040s. Amazingly, no.
Many of them are in practices that do a lot of family office type work or they do multiple generations or they do the corporate, the partnerships, the LLCs, and the trusts and individuals. So just because you’re in a financial planning firm doesn’t mean you’re just doing 1040s. A lot of them end up doing a lot of the more sophisticated work because you’ve got the integration of all the different types of tax coming together.
Then, of course, I never want to leave out a few graduates who actually work for the other side and work for the IRS and do very well at it. Whereas they tell me they’re a lot more knowledgeable now so they’re going to tell all my secrets so that I have to get some new ones in order to come up with new ideas.
I’ve even got a student currently in one of my online classes who works for a state Medicaid operation and looking for Medicaid fraud, and she finds that by taking the MST it has allowed her to better understand the techniques that have been used by a lot of the practitioners and to better understand whether these trusts that are out there will stand up or not when is for her in order to see whether she’ll approve it so that somebody can go onto Medicaid or not.
So tax has that other side in that the knowledge of it can expand into a lot of areas that are not pure tax, that there are other ways you see tax come in to better understand what’s going on to be able to do the job. She in no way does any tax related work, but said that by taking the course it was one of the greatest to have because now she better understood how all these things showing up on her desk operated and it allows her to better challenge them in their operations because she better understands what the wording – how it works, where it goes.
But, I mean, we see our students go into a multiple variety of professions, not just appear hard core tax preparer from January through April, but in a lot of other parts of the business environment because the knowledge of tax helps immensely in their understanding or their planning going forward. Back to you.
Evelyn Liougas: I would like to now turn it over to our enrollment advisor, Michelle, who will discuss the application process for the MST, Michelle?
Michelle Yan: Thanks, Evelyn. So in front of the application check list, typically there’s about a couple of things in terms of minimum requirements that we’re looking for. You need to have an undergraduate degree from an accredited institution. Your undergraduate GPA must be a 3.25 or higher on a scale of a 4.0. You need to have either an undergraduate or a graduate course in taxation with a grade point average of 3.0 out of 4.0 scale, and you also need a minimum of two years of professional tax experience including one busy season or hold credentials, which is a JB, a CPA, a CFP, or an enrolled agent. And finally, candidates whose undergraduate degrees are not from the States or not conducted in English may need to submit a TOFL, but it is a case by case basis. So a lot of times I would suggest that you talk to your enrollment advisor to find out exactly what information and requirements are specific to your case.
In terms of tuition, the cost per credit hour at this point is about $1,345, so $1,345 per credit. There are a total of 30 credits overall and the total tuition is about $40,350. Now additional costs – I would say if you’re looking at textbooks or course material, average – I would allocate anywhere between $100 to $200 per course when you’re looking at text books and course material.
Now this rate, this tuition rate, has been our rate for 2013 and for Fall it’s actually going to increase a little bit as tuition multiple times do and starting 4/1, we’re actually going to be increasing to about $1,385 per credit hour. So you’re looking to pay about another $4 extra for the full term.
In terms of financial aid information, it is a case by case basis. Most graduates who are looking to go back to obviously graduate school may apply to FASFA. Usually we work with something called Graduate Stafford Loans. And because our online MST program sort runs all year round, you can actually apply for all year round. I know sometimes some students will go onto a Northeastern financial aid website and say that there’s a March deadline to complete your FASFA forms, but that’s typically for our undergraduate or on-campus students. But in terms of financial aid, Graduate Stafford Loans, you can apply all year round. We have that website underneath there to take a look at what type of financial aid is available for you. There’s our school code, and again, for more specific information you can speak with your enrollment advisor or you can basically speak directly with FASFA and speak with one of their advisors there.
Evelyn Liougas: Great, thank you, Michelle. Before we proceed to the Q&A session of the webinar, we would like to conduct another short online poll. The question is what types of webinars would you be interested in attending in future? Ones about program information, the application process, student/alumni spotlight, faculty spotlight, particular industry topics, or other. Please take a moment to select your answer and I will share the results with you shortly.
I would also like to let everyone know that the D’Amore-McKim School of Business also offers these online business degrees and they include a Master of Business Administration with a specialization, a Master of Science in Finance, and most recently, a graduate certificate in supply chain management.
So now we would like to begin the question and answer period. Just a quick reminder, if you have any questions, simply type in your questions in the chat box on the right side of the screen and they will be addressed at this time. So the first question is for the Professor. How is this program and degree received by others? Specifically by potential employers?
Tim Gagnon: The degree and the program have the same status, have the same degree. You get the same diploma as the ground up program does and we have a very good reputation with employers because it is a Northeastern University diploma. It doesn’t say online, it doesn’t say anything other than Northeastern University. So it has a very good acceptance because it is a degree. It follows our ground course. It’s the same courses as the ground course, so it has the same reputation going forward.
Evelyn Liougas: Great, thank you. The next question is, again, for you, Professor. I’ve not had any tax classes but have been working in rules where I’m responsible for company tax compliance since 1998. Would I still be eligible for the program?
Tim Gagnon: As Michelle said earlier, that would be more of a case by case basis. It’s still possible because you’ve had enough exposure, because you’ve got more than two years of experience, you’d still be eligible for the program. The reason we put the experience requirement in, most colleges undergrad have one, maybe two, tax courses in the program, and they’re wonderful classes, a lot of times I teach them, but they’re very usually overview, general-type courses, so that alone isn’t really going to get us really where we need to be which is why we put the experience requirement in with the hands-on going forward.
So not having an undergraduate tax course won’t be a problem at all. The experience will far exceed what you would have picked up in that one course. It’s not critical. It always helps, but I’m going to guess that in the years that you’ve been practicing, you’ve seen a lot of different things probably more concentrated where you are, but I don’t think that’s a detriment to getting into the program. The multiple years of experience dealing in the tax area, getting in familiar area with the code and that will probably get you through fine.
Evelyn Liougas: Great. Next question is for Michelle. How long is the program and are there any on-campus requirements?
Michelle Yan: The program itself is a minimum of 16 months. There’s ten courses involved, you do take them one course at a time and each course is about five weeks in length. And I’m sorry, Evelyn, what was the second part to that question?
Evelyn Liougas: If there are any on-campus requirements.
Michelle Yan: Okay. No, there are no residency on-campus requirements at all. But, I mean, you’re more than welcome to come to our campus in Boston. If you want to come you can use all of our facilities, bookstores, libraries and so forth because you are a Northeastern student. But it’s not a requirement to come.
Evelyn Liougas: Great. The next question –
Tim Gagnon: May I follow up on that?
Evelyn Liougas: Yeah, please.
Tim Gagnon: You can do it in 16 months. We find most don’t complete it in 16 months because of tax season. And we try to adjust and accommodate realizing that tax season is there and it can’t go away. So we’re finding that for the most part people are completing in about two years. The few more months just because of trying to work around tax season and study can be tricky. We have courses going on but it doesn’t always work well with the job requirements.
Evelyn Liougas: Great, thank you. This is for Michelle. During the courses are there any specific times that I need to be online?
Michelle Yan: There isn’t any specific times that you need to be logged online. We work – our online program, we work with an asynchronous system. So all the lecture material, courses, assignments and so forth are available for you to view at any time day or night. So if you’re – I know a lot of students coming to this program full-time, 9:00 to 5:00, 9:00 to 6:00 and they have kids and so forth, and sometimes the only time that they can really do their work is in the evening. So if you put your kids to bed at 8:00 or 9:00 you can start to do some work, do a couple of hours, do some work over the weekend, I should say. So a lot of the material will be available to you at any time. For more specific questions regarding the online setup and so forth, again, feel free to interact and speak with your enrollment advisor. They’d be more than happy to explain a little bit further in terms of what is involved as well.
Evelyn Liougas: Great, thank you.
Tim Gagnon: But there are two usually online chats per week; one by the instructor and one by the lead professor, which are live chats, which is an opportunity for the student and the faculty to interact at that point as opposed to just sending forward questions. And they are recorded so that they can be reviewed after the fact. But we try where we can to arrange chat times so that students will have an opportunity to have a live discussion with the professor about their questions.
Evelyn Liougas: Great, thank you. The next one, I believe, probably for both. Does working for tax preparation companies, such as H&R Block, for example, and technical support area with exposure to personal and corporate taxes qualify as experience? That’s a tough one.
Michelle Yan: Professor, do you want take that one?
Tim Gagnon: I knew that was going to come my way. We have to take a look at really where your exposure and tax base comes from. If you’re highly the person who is making sure the program works, than the IT, I’m not sure if you have enough exposure as opposed to if you’re working a certain section – I had a student one time who was in H&R Block and he specialty with schedule C, and he basically just did schedule C’s for every time the client came in or for the office, and that was sufficient because he had enough exposure to the tax code, the interaction of the code in the higher, but it was found that he wouldn’t be detriment going forward.
So it really would be a question of where’s that exposure and what kind of exposure is it from a tax standpoint. If you’re applying and Michelle gets that, I’ll be happy to look at your curriculum vitae and see if we can fit it in and if it will cause you any challenges going forward.
Evelyn Liougas: Great, thank you. Next question is probably for Michelle. Is there a break during the busy tax season or am I expected to be studying at this time as well?
Michelle Yan: As Professor Gagnon had mentioned before, usually the program itself can be completed as quickly as 16 months, but obviously this program is directed towards working tax professionals. So we do understand your tax, the few times. You know, your 3/15, 4/15, and some students are bowing at 10/15. So during these times when you see that things are very hectic, you can take breaks during this time. Like the Professor said, usually most students actually do complete their program instead of 16 months, it’s more like two years or 24 months. So, yes, you can definitely take breaks during your busy time.
Evelyn Liougas: Perfect, thank you. This is a question about books and textbooks and other course material. Are these sent to my home or is everything mostly online? This is for the Professor or Michelle.
Michelle Yan: In terms of textbooks and course material, if there are any physical textbooks you would like purchase, you can purchase them new or used and you can have them mailed to you. So you just input your mailing address and it will be delivered to your door. If there are any types of online materials that you can just download, you can just pay it, and then you can just download the materials. So you can get them either or.
Tim Gagnon: I guess a lot of my students are checking what books they need earlier and are going after them on their own because many of them getting then on their Kindles or iPads and not even getting the physical books. And they’re renting the books because you can now rent textbooks, believe it or not, or they’re just downloading them into their iPads so they have them with them. So there’s no physically having to mail to them. So all the different methods are available if the publishers have.
Evelyn Liougas: The next one is for the Professor. Will the MST prepare me for the CPA?
Tim Gagnon: The whole CPA exam? Absolutely not; it’s not geared that way. It will help you with the regulations that course – or the regulation part of the exam, but it’s not geared to be a CPA preparation course or in any way designed to get you through the exam. It is not from that standpoint because we’re not going to get into auditing or all those type areas, so it’s not designed to prepare for the CPA exam.
Evelyn Liougas: Okay, just a follow-up question to this. Will the MST fulfill the educational requirement for the CPA?
Tim Gagnon: That’s a state by state question. You’ll have to check that with your state. I know in Massachusetts, New Hampshire, this area, yes. I know in New York I think you have to have a couple more courses besides that in order to sit for it because they’ve got a couple of extra courses that they require. So you really have to talk or check with your state board to find out exactly what they allow or what they don’t allow because I have not talked to all 50 states to see what they will or not. So I would check with your state board of accountancy to see if they have any certain requirements beyond what you’re going to get through this program.
Evelyn Liougas: Great, thank you. Next one is for Michelle. What’s the app deadline for the next start? I guess that would be the July 8th start.
Michelle Yan: Yes, the next start date that we’re taking applications for, July 8th, we’re looking for documentation into us by June 17th. So there is still time. From now until then you have still a little over a month to put everything together. So if students are still interested in any of those start dates, July 8th, August 19th, or September 30th, feel free to speak with me by email, phone, and I’d be more than happy to help you put together an application portfolio.
Evelyn Liougas: Great, thank you. Next one is about – said the Professor – does the degree say online and are there any significant differences between the online program versus the on-campus program?
Tim Gagnon: The degree does not say online. You’re awarded a Master of Science in Taxation just like the people who go in the evenings on the ground. It does not in any way designate online. What was the second part of the question?
Evelyn Liougas: If the degree at all is different than the on-campus – the degree offered on campus?
Tim Gagnon: Not at all. We basically took our ground on-campus course and moved it up to the online. It’s the same courses currently that we give on the ground are given online. They’re not the same professors because the availability of adjuncts was different. But it’s the same courses, it’s the same 15 available courses, the same ten that you need to take. So it’s the same degree, the same strenuous, the same degree of competency required, the same diploma when you come out. So, no, we keep them in mirror so that the ground and the online mirror each other going forward. It’s a conscious decision that we made.
Evelyn Liougas: Great. So we have a couple more questions. What type of school work will I be doing each week and for how many hours? Maybe Michelle you can start that one?
Michelle Yan: I can speak to it in terms of the number of hours required. Usually we suggest students to spend about 15 to 20 hours a week on their work. Now depending on which area of tax expertise that you have, there are some courses where you may not spend as much because you’ve been used to it, you’re doing it every day at your work. There might be some courses that you might feel will be a little challenging that you might not be as familiar with or you want to learn a little more about, so you might spend more time on it. But on average I would say about 15 to 20 hours a week. Now in terms of more specifically regarding what type of assignments are available or what you need to do in terms of weekly tasks, I think that question’s more for the Professor.
Tim Gagnon: Mostly we designed the courses so that we have problems due during the week. I know in my courses I have practice problems that would be for the students to do that the answers area available within the course, so they can make sure that they’re getting information. But I also have a graded problems that have to be turned in each week to be graded but also so that we can make sure that you’re moving along in grasping the information and make sure that if there are areas that people aren’t grasping as quickly, we can get them either a little more information on it or bring it into a chat and give a little more attention to it. So it’s sort of for both benefits for the professor and for the student’s benefit.
In most of the courses at the end of the third week, the third weekend, there’s a mid-term and at the end of the fifth week there’s a final. From there some of us will possibly use blog postings during the week, and what we usually work with is a seven day week and we try to have things due the third or the fifth day of the week, so it gives you an opportunity to get into it, get something out, and then move on.
But we do – or at least I have found that having something due, make sure that you stay current because this is a five week program, you don’t really have the ability to take two weeks off and then play catch up. You really run out of time because I know we all did it when we were an undergrad that 14-week course and I’ll catch up with it at the end. But unfortunately with a five week, you really can’t catch up. So we’ve designed it to try and make sure that you’re moving along and staying up with where the course is going. Not saying that some people haven’t had a light – had a heavy week at work and adjusted around it and made up from that, but we try to keep activities necessary to try and keep you moving along to get you to the end of that five week period in good shape. If that helps.
Evelyn Liougas: Great. Just a follow-up question for the Professor. Is there a lot of group work involved?
Tim Gagnon: Usually within the five weeks there’s at least one group project. And we’re talking about a group project, it may be that the group is given a question and interact between themselves to come up with an answer that they will then submit. It’s done totally online. I know most of my students tend to do it by email between themselves so that they’ll take a problem, work it out, shoot it to each other. Everybody will have comments in. From that standpoint I know in the research course that we mentioned here, it has a group project in it which is basically a fairly simple question that they interact with each other working towards the solution that they’re going to propose and then they propose the solution for all of us to deal with.
So extensive, no, but most of the courses have at least one group project within there because we really do think that you have to learn in tax to work in groups because that’s how a lot of the better problems are solved. My students tell me that the group projects are really great because after the fact and down the road they have some people to talk to. They learn each other’s specialties or concentrations so then now they have a whole new wealth of friends that they can call on when they have questions and they know who’s good or bad in certain areas. So there’s a secondary benefit of the group work. And I know a lot of people won’t believe me but there is.
Evelyn Liougas: We’d like to thank you all for attending. This concludes our webinar.
This webinar features Professor Gagnon, the faculty director of the Online Master of Science in Taxation and a former partner at Coleman and Gagnon, providing an overview of the estate and gift taxation course. While many tax professionals understand the basics, this course delves further into the complexities.
Angela LaGamba: Welcome Northeastern University’s online Master of Science in Taxation Course Highlights webinar. My name is Angela and I will be your moderator for today. Before we begin I’d like to go over logistics for this presentation and address some commonly asked questions. All participants today will be in listen-only mode. If you’re listening through the phone line or through your computer speakers, we ask that you keep the background noise to a minimum. This will allow you to hear the presenters better. If you have any questions throughout the presentation we encourage you to use the chat box, which is located on the lower right-hand side of your screen. If you’re in full screen mode, the chat box is located at the top of your screen. You can just look for the bubble icon, and it might also have the words chat on that.
We’ll be taking those questions and addressing them in our dedicated questions and answer session at the end of the presentation. As we mentioned earlier, the event will be recorded, so you’re more than welcome to view this event at a future time by reaching out to your dedicated enrollment advisor for the length.
All right, with those logistics out of the way, let’s introduce you to your panelists for today. So you have two panelists. The first one is Professor Timothy Gagnon, who’s the faculty director of the online Master of Science in Taxation and a former partner at Coleman and Gagnon. Michelle Yan is the enrollment advisor on Northeastern University’s online Master of Science in Taxation and her roll is to help prospective students through the application and admissions process.
All right, what I’d like to do now is move into the first session for today’s webinar where we talk a little bit about the school and the program. I’m going to hand it over to our enrollment advisor, Michelle Yan, to get started. Go ahead, Michelle.
Michelle Yan: Thanks, Angela. So our MS in Taxation program is part of the D’Amore-McKim School of Business. It was established in 1922 and has a rich history, a strong reputation for scholarly research and teaching excellence. We are accredited by AACSB International, which is one of the highest business accreditations found worldwide.
Now the main campus is located in Boston, Massachusetts. We also do have satellite campuses in Charlotte, North Carolina as well as Seattle, Washington. Building on high academic achievement, wide-ranging work and consulting experience and our extensive ties. But the D’Amore-McKim School of Business faculty members are leaders in their fields and regularly receive worldwide recognition and awards for their contribution to theory of practice of management.
We do have a global network of over 200,000 Northeastern alumni spanning more than 15 countries, like China, Canada, India, England, Russia, and Australia, to name a few.
The online MS in Taxation program was designed with the working tax professional in mind. It will help tax professionals to increase technical tax knowledge, sharpen their research skills, keep up-to-date with tax laws and analyze complex regulations, related cases and rulings. It will give you the opportunity to interact with faculty members who are not only educators but practitioners in the field. So they do bring a lot of real life case studies to help you with your learning.
There are a variety of tax professionals coming into this program. So we do have students coming from public accounting arena, private industry, individuals coming from the IRS and, of course, the big four firms like Deloitte, KPMG as well. So it is a fantastic opportunity to collaborate on cases, trade ideas, learn from each other and also develop strong networking opportunities. Now, I would like to turn over at this point to Professor Tim Gagnon, who again, as Angela mentioned, is a faculty director of the online MS in Taxation program. Professor.
Tim Gagnon:Thank you. So I get the dubious task of trying to explain the program. Let me elaborate on one thing Michelle said when it comes to the different professors. We have 15 courses in the program. You have five required and then you have to take ten out of the 15. But we have five required and five that are elected from two different – we call them tracks, although you can take from any of them within int. But of that we have approximately 11 professors who are totally academic as well as practitioners. All of them are within their own firms, so they’re doing this day-in-day-out, as well as doing a lot of research and a lot of interaction on that.
So there’s a lot of hands-on that goes with the theory, which for my background, helps considerably, as you can see. As well as been a former partner, I do a lot of corporate and personal taxation, but I also do a lot of the estate planning administration. My focus in the program from a teaching standpoint hits a lot of the estate and gift area.
You’ll find that most of our professors are specialists, if we can use that word, within their certain areas. We’ve got people who are pension people; they actually own pension companies who teach our retirement plan course. We have people within it that they do a lot of corporate, they do partnerships, so they really focus on the areas that they’re teaching. So they bring a lot of world knowledge as well as a lot of practical as well as the theory that goes with it.
So I’ve found that when I was in practice – that’s 30-some years – that I always appreciated somebody who could actually talk to me about this is great, this is what the code says, but here’s what really happens and this is how you get there. And that’s the one thing that we tried to bring to the program is a lot of that practical knowledge. And we really asked the students to interact with us as professors to bring your practical and professional knowledge in so that we can sort of keep a discussion going and see if it has some application to going forward. So this is an opportunity to really hone the skills that will bring you forward, at the same time getting the actual theoretical knowledge that goes with it.
So let’s look at two courses that are within the program. I cheated and used two of them that I happen to teach so that it was easier for me. But if you look at it, we’ve got a tax research practice and ethics course on one side. This is one of the first two courses that you have to take. We have two courses that you take in your original because they sort of create a foundation to work forward from, but they also make sure that everybody’s on basically the same core level for moving in through it.
The tax research practice and ethics course is designed – will it make you the expert researcher? No. It’s designed to improve the skills you have. We do a lot of short exercises to expose you to all the primary sources, and if you’re not sure what the primary sources are, that’s one of the issues we go into in the course as opposed to the secondary source. But our whole idea is to expose you to all the different language out there, all the different sources out there in order to prove your case, in order to build from, in order to, in all honesty, keep your license clean because if you’re going to give opinions, if you’re going to make decisions, you’ve got to have the good backup to it. And if it’s not there, you sort of expose yourself. So we want to do that.
The second part of that is taking research and learning to apply it to the facts and develop a process that you use when I do research. Where do I go? How do I start? How do I improve or cut my time down to get to the answer I need to get to? So it’s really getting into that process and knowing it.
The secondary purpose of this is if you’re in an online program you’re going to find that a lot of your questions and a lot of your answers and a lot of your work involves researching the code, dealing with it because the different courses will have papers or research assignments in them and we really think that you need to have a grounding in that going forward because it’s a lot easier to get through the program if you’ve got an idea where the different sources are and how to get to them.
We also, while you’re in the program, have access to RIA through the Northeastern library. All you have to have is your NEU ID number and you can get into RIA, which again, we’re making sure that everybody has at least one core research database to work with in order to do your different assignments through time.
Now you take that course and you look further. You say, okay, I got through my research course. I got through my federal tax issues; the other required course. Now you jump off into an estate and gift course. This course for most people is an area that they haven’t delved a whole lot in. In most firms there’s one or two people who does the estate and gift tax work, everybody else sort of runs into it because it’s subchapter J.
It’s an area that doesn’t work like income tax. So the course is designed to expose the students to the two different systems.
Most of us are familiar with gift taxes, although, most of us usually run into that they make an annual gift, it’s under the $14,000, we have no 709 to file, off we go. But what if they go over? Need to know the system. What’s the interrelationship with the gift tax with the estate tax when somebody dies? Second part of that is what’s the interrelationship of the estate tax system with the income tax system for all those beneficiaries? There’s a need to know what happened, how it happened, and what the impact is. It’s also the core course for starting if you’re thinking about doing income tax or trusts and estates because you need to know how those two systems work to know what it does to the income tax side.
So really we spend a lot of time developing the whole idea and it seems kind of silly probably, but when is a gift complete? What makes it incomplete? What’s the effect if it’s incomplete? So we spend a lot of time just trying to dig out all the different situations that make a gift complete or incomplete and make it includable or excludable from the estate. So we’re really trying to create between the two systems how they interact, knowing when one’s in, one’s out, and what the impact is going to ____.
The second part of that is did you really have to get familiar with this because all of us who have ever done any income tax are constantly running into somebody inherited a stock or was given a stock, and then they go and sell it, and what’s are first question to them? Well, what’s your basis? And as they look at you like a deer in the headlights, they’re going, “I have no idea.” “Well, did you inherit it or did you get it as a gift?” “Oh, I inherited it.” Well, what was the fair market value date of death because that’s really what the basis sums up to. But we also have to look in there and say, okay, what year did you inherit it if it’s 2009, 2010, 2011, the difference on what the basis could be, and that’s what the course tries to pick up on, trying to find the nuances that go with it to give you a really good base going forward.
So you start off in the research side because you’ll need it in gifts and estate because there’s a research project in there. You’ll get your federal tax issues so you’ll get a fundamental on the income tax side. Now you start moving because you’ll have your estate and gift, you’ll have your partnerships, your corporations, the five four courses that are in there before you can jump off. The whole concept being that you’re going to start with a fairly simple course, get yourself situated.
The other thing nice about the research course is it gets you familiar and in line with how the online program works and what the interaction is, and all those type things so that you can get your feet on the ground as you move forth into the upper level courses. We’re expecting that you know how the program works and that you’re comfortable with how the interaction is between you and going forward. So you’ve always got that going but don’t think that you’re totally in isolation because the professors, as you can probably guess, love to talk and they’re always happy to answer questions and have feedback back and forth because it’s the exciting area; for us we like feedback.
So let’s take this estate and gift tax course all right? Most people aren’t familiar with it or have limited exposure, but it’s an area that can bring a lot of financial reward for the preparer because in most areas it’s very limited so that you can get a real niche in it. Sounds like I’m trying to sell the estate and gift tax area, and if it does I apologize, but 30 years of working in it, it’s the most exciting area that I can find. It works differently than income tax, so it’s a whole new system to try to learn, but it’s also an understanding that if you receive it, it allows you to do a lot more income tax side with trusts and estates. Next slide if you would.
So, always being the professor, I came up with some questions that I need some answers to. If you want you can just put your answers or type your answers into the chat box and see how we can do with this. So one of the fundamentals that we run into in estate and gift tax is what is fair market value? Why is it problematic to the standard of value? So what is – does anybody know how to define fair market value or really what it is? Any ideas? Go ahead and give me some ideas because I’m always trying to find this. Because remember fair market value for an estate and gift tax is the value that the heirs inherit the asset at. It’s the number for their basis going forward. It’s the number that they’re going to pay capital gains on, so it’s a number that’s highly important to us when we prepare an estate return or even an income tax return on anything that’s been inherited or received – on the other hand, not very good for the gift tax return because it’s a carryover basis. Does anybody have any idea what fair market value is?
Angela LaGamba: We’re seeing some responses come in. So one of our audience members responded fair market value is the value of today’s price.
Tim Gagnon:Ah, the value of today’s price. Do we want to limit it down to today because that’s going to get us a question going forward. I agree it’s what the current, but what we might want to do is what date’s going to be the most important to us in valuation?
Angela LaGamba: We also had another audience response from Brandon saying the current value of the asset today or the value of the property on the date of transaction. And Bob also wanted to add it might be the amount of willing and able – so basically would be buyers willing and able to pay for fair market value.
Tim Gagnon:Somebody’ read rev proc 5960 – willing buyer/willing seller, arms-length transaction and neither of them having the onus or need to complete the transaction. You’re right, you’re on the right track. The key for us in estate and gifts is what was the value on the date of death? Doesn’t matter going forward; I need the exact value on the day that the person died. And you’re right, under rev proc 5960, willing buyer/willing seller.
Second part of that, though, is how do I find a willing buyer, a willing seller, and know what they would have paid, and were they all paid the same thing? So that’s where we get into a challenge. If you’ll skip to the next slide we’ll give you –
Angela LaGamba: We also had a few other responses that came in. So we had Jason that said fair market value is the date of inheritance. And Mackin said, fair market value is the following day of death of the owner.
Tim Gagnon:It will be the date of death of the owner, not the following. Date of inheritance, I agree with you, it’s the date of inheritance it immediately passed the second the person croaked because it isn’t when you received the item, it’s when the person dies. So if you’ve got an immediately inheritance at that point, I agree. If you’re using inheritance as when I get the property, no, we’re back to date of death. Date of death precedes purposes as the big marking point.
Now somebody out there’s going to say to me, “Yeah, but what about alternative valuation date? Six months later we can deal with that one, but the whole thing is that we’ve got that marking point in the sand. I just wanted to throw up here the quick and short of it, it’s the rev proc 5960, fair market value’s price which property would change hands, willing buyer/willing seller, neither under compulsion.
The challenges comes is the arms-length – how do you know if it’s arm’s-length? Is arm’s-length – can it occur between a brother and sister or would there be the assumption of a gift moving across? What if there’s fractional ownership, minority interest, goodwill, which the IRS just came out and said that goodwill didn’t exist in transfers from a father to a son of interest in a business. So goodwill causes a problem because maybe all you get on that transfer is the actual value of the truck and not of the business, which could create some real issues. I mean, how is the property used – zoning, ____, all these factors come into that willing buyer/willing seller.
All of these factors affect what the fair market value is and all of them have to be dealt with when you’re trying to value because on estate and gift when I do an estate – or you do an estate – form 706 requires you to put in the asset in a fair market value date of death, you’re producing it, you’re submitting it, you’re giving it to the IRS on your return, and if your estate’s large enough you may owe taxes, but the other side of that is there are preparer penalties for overstating or understating values, and you’re sort of certifying the values to the IRS on the returns saying these were the values, I got them from the executor. I understand but this return is prepared properly to my full knowledge. So how far out do I want to go on the limb that this value that we used is a good value? Or am I going to step back and say wait a minute, this doesn’t really seem to be proper and I’m not willing to sign a return with a substantial understatement or overstatement because now I’m into circular 230 and penalties that go with it. So, valuation becomes critical for us, all right? Shoot to the next one if you would.
One question couldn’t be enough, I had to have another. Explain the pros and cons of using the will versus a revocable trust. In your opinion, which one is most effective? And these are typical problems that would show up in a lot of the discussion parts of the program. Whenever all of our courses, most of us have designed them with weekly exercises and problems, but also discussion forums among the students, or blogs where there will be a question, you have to post answers to it or reply to them so that this is the type of question that would be put out there for everybody to comment on, and for each of you to comment on each other’s answers trying to refine them and prove them.
Also could be a question like this showing up in an exam because if we’ve gone in and talked about wills and revocable pros and cons – give me three – give me four between them. So these could be the type of questions you would see in an exam or discussion. or you might find a professor throwing in during their weekly chats just to try and get information and try to bring forth the issues so everybody can talk about them and that we can sort of try to give you direction upon those.
I mean, we try to use inventive type questions to try and get you to think about it, but also to get some discussion and to and fro going because it becomes highly critical that you get a nice interaction. I’m a strong believer from my side that you learn a lot from the comments of your fellow students and try to analyze them and work them through and think them through, it’s amazing what you come up with. And it’s hard and sometimes you learn some of this stuff in a vacuum. So the interaction with these type of questions really gets you going back and forth, it really makes you think. And sometimes you do better thinking a request then if you have to verbalize or have to put it down in writing because you really – I guess we get nervous that we might say the wrong thing, and I have to tell you in my chats you can never say the wrong thing because at
least if you say something we can try to make sure that you’re on the right track. So anybody got any pros and cons using a will versus a revocable trust?
Angela LaGamba: Professor, we actually are getting audience responses. Mary said a revocable trust allows for the assets not to go through probate and assets passing just through a will must go through probate.
Tim Gagnon:Very true. I mean, that is one of the reasons that people use revocable trusts in their planning if they’re trying to avoid probate. One of the discussions that comes up in the class is, is probate as devastating as everybody thinks or is it something that we can get by – but that’s true. That is definitely a pro to a revocable trust, you avoid probate.
Angela LaGamba: We also had another response from an audience member and they said, another con that you might find on a revocable trust is just the large amount of paperwork that might need to be completed as part of the process.
Tim Gagnon:Oh, as a lawyer that hurts so deeply. A large amount of paperwork, you’re right, but we just love writing these things. But, yes, there is the documentation, the writing of it, and the cost of doing that. The second part of that is following the revocable trust during your life and having to go through the formalities. Now it doesn’t get a separate ID number but it does require you to rename accounts, re-title them and to process them and keep running them under the trust because if you don’t keep them under the name of the trust, they’re back into the probate, back into the will. So that’s certainly a con to the trust, although it has a pro of probate. If you go to the next slide I’ll give you a few of my thoughts.
Angela LaGamba: We also had another response from one of our audience members saying a will – one of the pros is that it’s open to the public while a trust is not open to the public.
Tim Gagnon:I’ll agree with you in the majority of the jurisdictions although there are some jurisdictions that require a revocable trust to be published at the probate if the will pours into the trust, but for about 98 percent of them, yes, that is true. Although, if you sort of look at trusts themselves, when we talk about a revocable trust we’re talking about a separate and distinct instrument as opposed to a trust under the will, which is totally subject to probate control. So I agree, it does give you a privacy that you can’t get otherwise. So we normally say to clients that the will is simple, touchable, maintain control, can be altered any way you want, any time you want.
Biggest con probably, as what you picked up, is that probate is a real challenge. Trusts, fairly flexible, avoids probate. You can control after death. The big one that I find with many people when I talk to them is that the revocable trust allows you to control the assets after death. Somebody once told me you can’t rule from the grave until I showed them a revocable trust that keeps going and going and going, a dynasty trust that started revocable becomes irrevocable? At the time of death I have to admit we don’t change the name. So call it revocable and if you ever come back from the dead, you can change the trust. But you’re the only one, as the creator of it, who can change it. So a revocable trust sort of becomes irrevocable at death, but it can continue through multiple generations. In certain states there’s no rule against perpetuities, so it can go forever. Other states say 21 years after measuring life – measuring life being anybody alive at the time the document was created.
So, I mean, you can be control in the next two to three generations down and when did they get the money, how did they get the money, and what it’s used for. Very valuable if there are children involved because there’s the opportunity if somebody goes young that the money can be managed and controlled for the benefit of the children through their lives and up through their school and have it left at the other end because remember with a will if you give something outright to someone, it’s theirs to control. It also means it’s going into their estate.
The other part of the revocable trust to keep in mind is many revocable trusts, as the assets grow, have tax planning in them in that they’re capturing the unified credits or applicable amounts, that each state or federal has so that we carve out assets to keep them from going through the estate tax system more than once. A trust can do that, a will can’t. A will basically shoots it back into whoever inherited it.
So if you have a married couple, here’s the opportunity to capture both the unified credits with a trust saving a lot of estate tax if their estates have grown large. Now you’re all going to tell me, yeah, but it was 5.35 million dollar unified credit on the federal side. Boy, most of my clients don’t have more than $5 – or $10 million. And I would agree with you in most cases, but never forget that there are 51 jurisdictions out there that also have some kind of estate tax or inheritance tax or gift tax or they may not have any, but you have to look at all of them because not all of them are in line with the federal government. I mean,
Massachusetts has a million dollars, Rhode Island has an $800.
So if you look through all the different states, you’ve got some lower limits before you could end up with a double taxation. So you can’t just say, well, it’s a 5.35 million, we don’t have any tax issues. Well, what did the state do? They got a million. We do have a tax issue if we’ve got a $2 million estate for the state purposes, but not for federal. So, again, as another way of revocable trust because it’s flexibility and because of its control during life or after death can set up to be some really great tax planning.
I have to admit, you guys are doing really well. So now I’m going to have to worry when you get to my course that I’m not going to have a whole lot to teach you; just kidding. But it’s all of these type of questions that really start a lot of discussion and really start to give you a lot of things to work from, but also of a practical nature because a lot of times students will tell me, “I didn’t think a lot about that but, you know what, I’ve got to go now and think about my own and my parents and say, wait a minute, should they have a trust, should they have a will, should they be in control, where should it go?”
In the course we move a little further down, of course, going from the revocables to the irrevocables, and the different kinds of trusts that are out there because all of them have an impact on the planning and on the preparation. Luckily, in your revocable trust during your life doesn’t have a separate tax return, but we do have to deal with at the time of your death, what about a tax return? What about doing a 645 election to have the estate and trust do the same return for the next period and those types of things.
But all of this has to be looked at throughout our time so that we get a really good feel for what’s the estate, what’s the gift, what’s the impact, and what are the tax ramifications? Do we owe an estate tax, do we not? Do we owe inheritance tax? Do we have a generation skipping tax, or we’re all set but what’s the impact on the income tax for the beneficiaries, for the trust, for the estate? What income tax do we have to pay, how do we have to pay it, and what’s included and what’s not included? Any questions that have arisen from there or anybody want to comment further on my answers?
Angela LaGamba: We do have an audience member who responded going, “The trust may also include the disability trust or the charitable trust, for example.”
Tim Gagnon:Yes, you could have charitable remainder trust, the GRITS, the GRUTs. One little thing you find in tax, we love acronyms – GRITs, GRUTs, FLAPs, FLIPs, all these types things, but, yes, it will include the charitable trusts, which are highly tax related planning, and will include the disability trust and the special needs trust. Again, those are more of a sophisticated nature and may or may not be revocable. They may be irrevocable, especially the charitables. But even the special needs and the disability may be an irrevocable or revocable but you’re correct.
When anybody says trust, you have to get them to narrow down to what kind they’re talking about and what they’re thinking it’s going to do because there are so many different kinds, and so many specialized purposes, but it’s all going to boil down for us to what’s the taxability? Is it included in the estate, is it not included? Does it have a step-up, does it not have a step-up? What was the basis going in? And what’s the tax on it? Do we have to pay the tax getting it in because it’s a gift? Do we have to pay a tax when you died because it’s in the estate? What’s our basis? Do we have an income tax? All that runs the gamut going along. Other comments that I missed.
Angela LaGamba: We did have another comment in regards to your earlier question in regards to the values. So he mentioned that, “Generally, the value for the will is having, again, a willing buyer and that willing seller who are mutually looking to transact at that point in time.”
Tim Gagnon:With no compulsion to complete. Yes. And that’s the hardest part of valuation is who’s a willing buyer, who’s a willing seller, and their arms-length, and they have no compulsion, nobody twisting their arm. And what number would they agree on?
Because remember, we’re coming up with a valuation under that situation. We’re talking about willing buyer/willing seller means been around since 1959 when the rev proc came out and hasn’t been really changed. But who’s the willing buyer, who’s the willing seller, and how do I know what that is when I’m just going out to value the asset to put it in the estate? I’m going out to create a value. So how do I determine what a willing buyer and willing seller would pay?
I mean, think about it for yourself. Is the price – if I had to include a stereo system in the estate, is the value what I might find it at Macy’s? Is it the value I might find it at Price Rite? Is it the value I might find it on Craigslist? How do I determine the value if it’s the same stereo system? Who’s the willing buyer, who’s the willing seller, and what’s the number because they’ve all three got different numbers? And that’s our problem from a valuation standpoint. We’re sitting somewhat in an isolated box saying, okay, what’s the price? If I go out and look, there’s three different prices. The next thing what’s the willing buyer/willing seller? If I go to eBay, what would they pay? So I agree, it’s the willing buyer/willing seller.
Our challenge is trying to determine what number they would come up with to include that value in because I’m guessing, and it’s totally a guess, that the price it would be on Craigslist will be probably less than it’s at Price Rite, which would be less than it’s at Macy’s because different buyers, different sellers, different analysis.
The other issues that we run into a lot is, is there a deduction or a reduction for built in cap gains? Should that make the value less because whoever gets it is going to pay humungous capital gains, and the IRS has said in the past there is no deduction or reduction or discount for built in gains. Although, there’ve been cases lately where they’ve given it a discount for built in cap gains, but that certainly would be a factor if I was figuring out a willing buyer/willing seller and this was – they were suddenly – you were inheriting this and it had a $2 million cap gain, would that affect what the value would be that you’d be willing to pay for it? Would it affect the value if you were buying – I think Carl Icon owned ten percent of the Family Dollar stores or one of them that just went into a merger? Would you pay the same amount to buy a share in that stock if you were going to be a one-share owner as opposed to owning ten percent or have a control over it? Would that affect the value?
So that’s why we find valuation and estate and gifts so tricky is trying to play with all the factors and the code having a willing buyer/willing seller, arms-length, no compulsion but that’s an ideal world and where do we find it? Sort of a long-winded answer, I know, but yes, I agree. It’s the willing buyer/willing seller but the challenge is finding out who they are, and we’ve got a lot of procedures and theory and practical and decisions around it, but it’s just trying to find exactly where that number comes in at. Any other comments that I can answer?
Angela LaGamba: There are a few other comments that have come in. What I’d like to do at this point is hand it over to Michelle to talk a little bit about the program, and then we’ll go directly into our dedicated question and answer session. So I encourage our audience to continue sending in those comments and those questions and we’ll be getting to it in about a minute or so. So, Michelle, I want to bring you back on the line to talk a little bit about the program and the tuition. Go ahead.
Michelle Yan: Thanks, Angela. So we have one more start date coming up for 2014 and that begins on September 29th. There is still time, so for individuals who are looking to come in for this last start date, we are still taking applications and there’s still time to apply.
Now the current tuition for the online MS in Taxation program, it’s broken down, as you see on the slide, $1,433 per credit hour. There are a total of 30 credits, and so overall tuition you’re looking at about $42,990 or about $43,000 overall.
Now, a lot of times we do have – I think some of the questions might come up regarding funding options or in terms of paying. I’ve been talking to a lot of my students that many companies may offer some form of tuition reimbursement. Student most of the time can do a combination. If you have tuition reimbursement, if you have a little bit of self-funding yourself, some students may look into financial aid. So this is a great combination to be able to fund your tuition.
Some companies may say, well, I have a percentage that I’m going to give for the tuition reimbursement. Some companies may say well, there’s a capped dollar amount per year. So it’s actually very advantageous for students in situations where their companies say, well, okay, here’s $5,000 or $8,000, here’s $10,000 calendar year, right? So in order to take advantage of that why not start sometime this year so you can take advantage of that tuition reimbursement and then in 2015 you have a new amount to work with.
Angela LaGamba: Thanks, Michelle. Let’s move directly into our question and answer session. So we do have a number of questions that have come in and for our audience to continue to use the chat box and we will be addressing those directly to the panelists. So the first question that we have, Professor, is around the two questions that you had put up earlier. One of our audience members wanted to ask is it safe to say that a trust or estate will be terminated after a complete distribution? Go ahead, Professor.
Tim Gagnon:It’s safe to say that an estate will normally be terminated after total distribution. A trust total distribution is a question of when it occurs. But, yes, once there’s no assets left the entities go out because they have nothing to manage or to maintain. Most estates last the IRS says after two years, please give an explanation why it’s still open, while trusts will go until there’s nothing left. And to be technical, even though you’ve closed the trust there may be a cleanup period while you’re still trying to get the assets out. But, yes, they are over when the assets are distributed, if that answers it.
Angela LaGamba: And to our audience member, if you have any follow up questions please feel free to type that into the chat box. The next question that we have, again, for you Professor, is which taxation courses can provide broader knowledge in the investment area, like private equity funds and hedge funds?
Tim Gagnon:Well, we have a – we’re going to be dealing just from the tax standpoint but we have a financial instruments course that deals with a lot of the different areas out there. You’re going to see some of the hedge funds and like that are run as partnerships, so the partnership course and the advanced partnership course will have a little bit more exposure to those types of hybrids. I mean, they’re all going to have the basic stuff, but we do not have a specific hedge fund course. But we have courses that are going to give you the fundamentals to work with them and a lot of the inter play with them, if that helps.
I mean, when we set this up we sort of in our minds saw a corporate track that gets into partnerships, corporations, advanced partnerships, S-corps, those type things, and then we had what we call the personal tracker, it’s more the individual track that gets into estate and gift, income tax of trusts and estates. It gets into retirement plans, financial instruments, insurance and all those type areas that have a tax basis. So we sort of try to keep those going forward and even in there we have an estate planning course that tries to take and now apply the estate and gift rules to try and figure out how planning goes forward. So if you stayed within the corporate side you’d get a lot of the fundamentals to deal with those type areas. Does that help?
Angela LaGamba: Thanks, Professor. The next question that we have from our audience member, they’re looking to find out are we or will we be getting into the non-profit and private foundation for the program?
Tim Gagnon:We don’t currently get into non-profits or private foundations as a separate course. That’s a very specialized area; it’s a fun area. But we don’t have a course that’s specifically on those, and from that standpoint, no.
Angela LaGamba: The next question that we have – by the way, Jason, our audience member commented that absolutely it is fun to delve into the non-profit and private foundation area.
Tim Gagnon:It’s loads of fun but it’s a very specialized and limited area. I’d have to see if I could find a professor who’s knowledgeable about that and willing to teach about that.
Angela LaGamba: The next question that we have is if a trust is used for legitimate business, therefore who will the tax go on the income? Is it safe to say that the beneficiary will pay for it?
Tim Gagnon:A revocable trust, which is normally treated as grantor trust for tax purposes, the underlining beneficiaries will carry the tax every year because it’s 100 percent distribution coming down. If it’s not a grantor and it’s a typical or a revocable trust that does not require that all income be distributed each year, this is getting technical, the DNI or the distributable net income will determine who pays. If the trust holds the income in and doesn’t distribute, then the trust will pay the taxes that come through the business. If they distribute any money out of property out to the underlying beneficiaries, then the beneficiaries will carry the tax up to the amount of the distributable net income determined for the year under the trust.
And there’s a lot of technical in there, and I apologize, but basically up to the amount of the amount of the income if distributed will go to the beneficiaries to pay. Anything not distributed that comes from the current income will be paid by the trust. But that’s a complex trust as opposed to a simple trust. A simple trust distributes everything. That’s things we get to talk about on the income tax of trusts and estates.
Angela LaGamba: But it’s also an exciting topic and I can see our audience has a few questions on that area. The next question we have from our audience member, Michelle, this is for you. The question is what is the maximum number of courses that can be taken online in one semester?
Michelle Yan: In one semester, so we – our full semester for the online program, we run, first of all, course all year round, January to December. Every semester or term it’s four months. So usually our spring term begins from January to sometime April. Summer term begins sometime end of April until August, and then our fall term begins sometime around mid-August to December.
So, three terms, each term about four months. So within the four months you are able to take – some terms will offer a maximum of three courses. So each of the courses are five weeks in length and typically you get about a one-week break in between two courses. So if students had wanted to – so for example, for fall, the students that come into our fall one, the August 18th start date, which has closed already, but there will be a class starting fall one, August 18th. If they wanted to take courses back to back in fall, they would be able to take three courses back to back basically.
Tim Gagnon:One thing we should comment on, in any five week period you can only take one course. You’re only allowed to have one course every five weeks. It’s a little too onerous to try and take multiple in the five week period.
Michelle Yan: Correct, yes. Presently, we mentioned – so you are only taking one class at a time or one course at a time. No more than one course at a time.
Angela LaGamba: Thank you both. So that is all the time that we have for today. I just wanted to hand it back to the Professor to see if he had any additional thoughts or comments. Go ahead.
Tim Gagnon:No, not additional thoughts, but I look forward to – I say seeing you all. I know that seems kind of strange, but we do use an online chat, which we do use cameras and mic and we do really feel like you should also use them so that we can get let’s say facetime or at least get in asynchronous discussions going during our chat periods so that you really can see. And I’d love to see you guys in the coming months, and we enjoy the challenge of trying to widen our knowledge – even for us as professors, widening our knowledge because all of you bring a lot to the table and a lot of information that we can all learn from each other.
Angela LaGamba: Thank you, Professor, and also thank you to Michelle for taking the time to talk about the program and answering all of our questions. A couple of closing thoughts for our audience, a recording of the session will be available in the next few weeks. Feel free to reach out to Michelle if you have any questions about that. You can also speak to her directly if you have any additional questions about the program. Thank you to everyone for participating in Northeastern University’s online Master of Science in Taxation Course Highlights webinar.
This webinar features Professor Zullo, accounting and taxation lecturer in the Online Master of Science in Taxation program, discussing the content of the Federal Tax Issues and Analysis course, including how to read a court case, how to understand a court case, and how to brief it. This webinar concludes with a dedicated Q&A.
This presentation is in listen only mode. So, you’re able to ask questions by simply type them into the chat box on the right-hand side of your screen and hit enter. If you’re in full-screen mode, simply hover your mouse over the very top of the screen and hit the echat icon and then enter your question there. We’ll be addressing your questions throughout the webinar, but mostly during our dedicated Q&A session, which is found at the end of the session. The event is being recorded, so it can be viewed at a future time.
We’re very excited to have a full panel today. We have Professor Ronald Zullo and Michelle Yan with us. Professor Zullo is an accounting and taxation lecturer at Northeastern University’s D’Amore-McKim School of Business. His primary teaching interests include federal income taxation at the individual and entity level. And prior to joining Northeastern, Professor Zullo spent over two decades practicing in public accounting. He’s a member in good standing at the American Institute of CPAs, and is a licensed certified public accountant in the commonwealth of Massachusetts since 1933.
We also have Michelle, our enrollment advisor on Northeastern University’s online master of science and taxation. Her role is to help prospective students through the application and admission’s process. And I am Angela and I will be your host and moderator for this session.
So what can you expect in today’s webinar? We’ll be talking a little bit about Northeastern University and the online master of science and taxation program. We will then have the professor provide us with more insight on the federal tax issues and analysis course. And then Michelle will be going through some of the admissions requirements and tuition and scholarship information. Throughout the session you are encouraged to send in your questions, and you can just type those into the chat box and we’ll be going through those throughout the session and during our dedicated Q&A. With that, I would like to had it over to Michelle to get started and tell us a little bit more about Northeastern University.
Thanks very much Angela. Let’s see if I can get the next slide. Thank you. Our MS and taxation program is part of the D’Amore-McKim School of Business. It was established in 1922 and has a rich history, strong reputation for scholarly research and teaching excellence, building on high academic achievement, wide-ranging work and consulting experience, rich diversity and our extensive corporate ties. D’Amore-McKim School of Business faculty members are leaders in their field and regularly receive worldwide recognition and awards for their contributions to theory and the practice of management. If you have a global network of over 200,000 Northeastern alumni, spanning more than 15 countries, like China, Canada, India, England, Australia to name a few.
We are accredited by AACSB International. It’s one of the highest business accreditations found worldwide and most recently Northeastern University’s online graduate business programs was ranked no. 17 in the U.S. by the U.S. News & World Report. This also does include the online MS and Taxation program as well.
So, thanks Michelle for telling us a little bit about Northeastern. It would be great if you could also explain to us a bit more about the online master of science and taxation program.
Absolutely. So, the online MS and Taxation program, it was designed with the working tax professional in mind and the coursework itself is 100% online with no residency requirements. The program can be completed as a little as 16-18 months and there are approximately 10 courses and courses are taken one course at a time.
Now, in this program we also do offer two tracks, two specialty tracks. Taxation of entities and taxation of individuals. The program is structured to increase your technical tax knowledge, sharpen your _________ skills, keep updated with tax laws and analyze complex regulations, related cases and rulings. Furthermore the GMAT, GRE is actually not a requirement for this program.
Now there are a variety of tax professionals coming into this program and I think sometimes with online programs, students are wondering how does the networking work? Am I able to interact with individuals in my class because it’s online? We do have students actually coming from public accounting firms, private industry. We have individuals coming from the IRS, as well as the
big four firms. So, it is a fantastic opportunity to collaborate on cases, treat ideas, learn from each other. You have an opportunity to work together on group projects as well, and this also will help develop very strong networking opportunities.
Now, this slide shows some results that we have compiled from the graduates of our online MS and taxation program. The survey was conducted in July, 2014. So, out of the students that we survey, 9 out of 10 alumni surveyed, rated Northeastern’s online MS and taxation, the educational experience as very good or outstanding. 9 out of 10 alumni are very satisfied or satisfied with our program. And 8 out of 10 alumni would certainly recommend our programs to a friend or colleague.
Thanks Michelle for walking us through the master’s program and to our audience, if you have any questions about the program itself, feel free to put that into the chat box and we will address that through the webinar. What we’d like to do now is to hear from you around why you’re considering an online master of science and taxation. Perhaps it’s around personal development. Maybe you’re looking for advancement opportunities in your current workplace, or you’re just interested in furthering your education with a graduate degree. Or maybe it’s all of the above. If you have any other reasons, you can also enter that as well. We do have a poll located on the lower right hand side of the screen. Or if you’re in full screen mode, click on the poll icon by hovering your mouse over it and clicking on that icon. So, we’ll give everyone a few minutes to fill that in.
And interestingly enough, it looks like most of our audience is saying that all of the above is the response, but we’ll wait until the final results come in. In the meantime what I’d like to do is to hand it over to Professor Zullo to talk to us a little bit about the federal tax issues and analysis course. Go ahead professor.
Thank you Angela. Hi everybody. I just wanna welcome you to the webinar and I wanna tell you a little bit about myself first and then I’m gonna talk a little bit more about the program. I am truly a CPA at heart. I came into the profession in the 80s and been a CPA for over 25 years and I’ll always be a CPA. But several years ago, I took an opportunity to teach one course at Northeastern. I never thought of myself as an educator, but taught a course at Northeastern, and then I started to realize how much I belonged in the classroom and how much I belonged in front of students. ‘Cause it takes a lot to understand this stuff, but it takes even more to be able to explain it.
And we’re talking about taxation, which I always liken to being just like a foreign language. I’m teaching you a foreign language and it’s not a simple foreign language. It has its own lingo, it has its own speak. So words that we use in plain English are often used most differently in tax.
So, I was an adjunct faculty from 2006 to 2013. I came on the faculty full-time beginning in 2014. In my role in the MST online course is essentially I teach one of the two entry point courses being federal tax issues and/or tax – I don’t teach tax research, but those are typically the two entry courses.
Before we get into sample course work, I do wanna talk a little bit about the program in terms of expectations. Now, a lot of people come into a program like this and say, well five weeks, it’s gonna be a lot easier, it’s a third of the material. Well, nothing could be further from the truth. What we have here and I think Michelle mentioned it earlier, you take one course at a time. And the reason you take one course at a time is because you need time to sleep, eat, re-hydrate and if you have a job. So, you’re going to need that time to do other things.
We’re looking at 15 weeks worth of material that’s really brought down to a five-week mentality and it’s not watered down in any way and it’s very, very intensive. And the best information you can get from students is when you see them later on or you hear from them later on. And what I’ve heard from students is I never realized how hard this was going to be. I thought the material was going to be cut back a lot and that there’d be some leeway given.
And as my colleague, Professor Gagnon always says, you’re not getting an online MST, you’re getting a Northeastern MST degree. So, there’s not a little asterisk or a little notation saying that you went through a different program. So, contrary to some beliefs and then in some cases hopes of students. This is all the material in a very much shorter amount of time. So, I’m looking for students to spend 15, 20, 25 hours a week on this course. Now that sounds like a lot, but when you think of it in terms of a 15-week course, it’s really just three hours a week, only it’s more in a shorter period of time.
And it also, when students ask me how much time am I gonna spend on this? It really depends on the background that you have. Now, we have sort of a baseline requirement that you have a certain amount of tax experience. But, if you’ve been in the tax profession 20, 25 years, you could spend less time on the course. But, I just wanna make sure that everybody is prepared.
And the real issue is when students fall behind and try to catch up. There is no catching up. It’s five weeks. You have a midterm at the end of week three and a final at the end of week five. And the material that we cover is very eclectic in terms of it covers some of the broad materials in the area of taxation, but it’s covered in a way where there’s some individual course work, there’s your individual readings, your individual projects. And of course your final and your mid-term, but then there’s also ample opportunity for group work. We have discussion boards where we try to bring in current topics and have you discuss them with one another. And then we jump in and try to redirect you and make sure that you’re on the right track.
But what we have to always remember is that there are students in this program that may have three or less years of bona fide tax experience working with somebody who’s been doing it for 25 years. Now there’s a nice mix there, but what we always have to remember is that we come to this course with different levels of experience. And in general, no matter how much experience you have, my experience is that you’re always learning something in tax.
I’ve been teaching since 2006, and virtually every time I run a course, whether it’s this course or an on ground course, I end up learning something because I get a question from somebody that is not what I would have expected. You know you can expect a lot, but you can’t cover all the bases. So, that’s the interesting part of what I do. Next slide please.
Okay, in terms of some of the things that we do, like I said, we do a variety of different materials. One of the things that students tend not to have experience with coming into a master’s program is something called the case brief. Now, if you’re watching the court television shows, they often talk about attorneys filing their briefs with the court. Those aren’t the kind of briefs we’re talking about. Those are called persuasive briefs. The kind of briefs we talk about here are you’re taking a court case and your summarizing it in a particular format. And when I say summarizing it, you have to remember that these court cases can be three pages, four pages, or they can be 50 or 60 pages. Especially when you get some of the judges that like to write long opinions.
So in dealing with tax work, we always start with the Internal Revenue Code. We call it the code or the IRC. That’s always your line of first defense, it’s always the first place that you go in the area of tax. When we don’t get our answer in the code, we go to regulations and then we go to other authoritative material. And in one element of the authoritative material is the court case. Now the court case could be a Supreme Court, it could be an appeals court, or it could be a local district court or the tax court.
In other courses we’ll get into the reasons why you may or may not go into a particular court at the lower level. You don’t just go to the Supreme Court. You have to apply and the case has to be important enough, but I don’t wanna get off on that topic.
So in general, what you’re gonna learn in this course, besides just your basic tax and your framework is how to read a court case, how to understand a court case and how to brief it, because the night before an exam or when you’re talking to your senior partner at your firm, you don’t wanna be sitting there reading him or her a 50-page case. You wanna have it boiled down to the one page. And in this course, we like to call it the one-page rule. Your case brief will be one page or less.
So let’s take a look at an example here. On the first bullet point here, we have the Internal Revenue Code. Under the Internal Revenue Code Section 61, the term gross income is all encompassing and all inclusive. Now a lot of you may be aware of this if you’ve had experience, but in terms of some of the nuances of what can be taxable, a lot of people don’t have any experience.
Well, there’s a case that I like to talk about and we do talk about this actually in the first course called the Cesarini case. And what we’re gonna do is we’re gonna look briefly at the Cesarini case and then we’re gonna try to construct or I’m gonna try to give you a little bit of framework as to what a case brief looks like. So, if I can have the next slide please.
Here’s a brief summary of the facts. There’s a lot to this case. There’s always different layers going on when we talk about a court case. But, I’ll put it in the framework of a show you all might see called the Antique’s Road Show where people find things or they discover something of value where they otherwise didn’t know something of value.
Well, here’s a situation where the Cesarinis purchased a used old beat up piano at a yard sale and they paid $15 for it. And several years later they took it apart, they lifted up the lid and they were cleaning it and they found approximately $4,500 in cash inside the piano. Now for reasons that you’ll learn more about in another course, they reported the income of their return, paid the tax. Then they filed an amended return taking out the income. And there’s a technical reason why they may have done that, but I don’t wanna get into those details.
But the point is they ultimately applied for a refund of the tax they had paid on the $4,500. They were denied a refund and they went to the district court, which is a lower court. And the court found that the $4,500 that they found in the piano was taxable and it was taxable in the year realized, which means it was taxable in the year found. So, even though they bought this piano in 1957, they didn’t find the money until seven years later in 1964.
And one of the things that they argued was it should have been taxable income in 1957 and this thing called the statute of limitations is closed. In other words, generally, if you filed the return and it sat for three years, the IRS can’t do anything about it and they can’t assess you on anything. So, what they’re saying is to the IRS is you should have taxed us in ’57, but you can’t because that year is closed by statute.
So what happened instead is they argued that this was found property, which is called treasure trove. And another way of looking at this is it’s called a windfall. So, the windfall theory says that, or used to say that if you find something, you didn’t earn it. They didn’t earn this money. They didn’t go out and work for it, they didn’t sell anything, they didn’t have any labor, they just simply found it. There used to be a theory in the early days of the tax code where one could argue that something that you found is not taxable, but it’s very clear. And a lot of people don’t know that what you find is taxable.
So long story short, they had to pay tax, they didn’t get a refund, they were required to be taxable on the $4,500. So, this is not a very long case, I’ve only given you a paragraph. It’s about three or four pages long. But if we go to the next slide, we’ll show you the basic format of the brief. Now this varies by instructor and it only varies in very subtle ways. But the way you put a case brief together is, like I said you wanna be able to use the case brief as a tool. This is what the case says in a page or less.
So the first section is fairly straight forward, the facts. So you summarize the facts of the case. The relevant facts of the case, similar to what is on the previous slide. And as a matter of fact, if I were doing a case brief, I would cut those facts down a little bit more. I’d put additional facts in because I didn’t wanna include the entire body of the case.
The next section of the case brief is the issue. And the issue is typically a question – think Jeopardy – it’s typically a question that can be answered with yes or no answers. Is the $4,500 that was found taxable to the Cesarinis? Answer, yes or no. Or the question could be framed differently. Are amounts found by the taxpayer taxable? Or another way of saying it, are the amounts found excludable from gross income? In which case, the answer would be no. So, the answer to the question doesn’t matter so long as the answer matches the issue/question.
The third section is the holding of the decision, and this is where you actually put in the yes or no. So, in my example, the issue is are those amounts found by the taxpayer in the piano taxable in the year found – that’s the issue – holding? Yes. The amounts found do constitute gross income based on the realization concept which is, again it’s the second paragraph of the previous slide. You can gob acknowledge and look at that at your leisure.
And then the rationale goes on to explain – in this case there isn’t a lot of rationale – but it goes on to explain that gross income includes all income from whatever source derived, including treasure trove. Interestingly enough in this case, they don’t cite the actual IRS regulation that specifically says that treasure trove is taxable. I find that interesting in this case. I’m not sure why they don’t do it.
And as you read court cases, you understand. I’ll sit here and critique them and say I don’t know why the court didn’t say this or that. But you gotta remember something, courts are different in their specialization and their understanding of tax. For example, tax court is full of judges that only hear tax cases. So, they have the ability to become tax experts. But if you end up in front of a district court judge, or when you ultimately go to appeals, the appeals court judge, those judges hear all kinds of cases from criminal cases to tort cases to property cases. They’re not tax experts.
So sometimes when you have a bad set of tax law, you wanna go to a place where the tax people aren’t that smart, and I’m being serious. You wanna go to a place where the tax people aren’t that smart. But, if you have a good set of tax law, you might wanna go to the tax court judge who has a better understanding of tax law.
So that’s about it. That’s about all I have on case brief. Now, during this course, what we ask the students to do is we assign you five case briefs and you can do as many as you want, but we’re only going to keep for grading the highest two. So, it gives you an
opportunity to practice, but it also gives you an opportunity to make mistakes. So, if I’m going to grad your highest two our of five, you know maybe you should do them all.
Now there are some students that will do very well on the first two cases, either through luck or experience and they won’t do the other three. I think when you have myself and my facilitator who currently is Mitchell Franklin, where you have us involved, it’s good to do them all just to get some feedback because we’ll give you feedback even if it’s not the one that we end up grading and counting. We grade them all, but we count the highest two.
So, case briefing is something that you will see throughout the program. You’ll see it in research and you may see it in other areas, but it’s really a tool. It’s not really an end unto itself, it’s a means to another end. And this is not true in this course, but I might be in a course or I have 30 cases that I have to read and I have to understand them all. Well, those 30 cases could be 1,000 pages or several hundred pages. What I’d really like is 30 one-page case briefs for study purposes. And then believe it or not, even 20 years down the road, keep ‘em in a binder, you may use them again.
It’s amazing, doing this for 25 years, how many times I go back to something I was looking at 20 years ago and somebody will say, well it’s tax law, it changes. Tax law does change all the time, but there are some basic tenants of tax law that never change. What is gross income? What is reasonable? What is ordinary and necessary? There’s all kinds of basic knowledge that doesn’t change. What I’m doing right now is I’m updating this course for the annual changes, so that when you all enroll in the fall, you’ll be – we’ll update the material for 2014 tax data.
Right now, we’re doing it at the 2013 level. And those are the things that change every year. But that’s 20% of the course. 80% of the course are the basic concepts of gross income. You can take this course now and you can take it in five years. The only difference would be some of the numbers. But many of the concepts wouldn’t change. So tax does change all the time, but there’s a whole base of knowledge that doesn’t become obsolete. Anyway, I think I’ve talked long enough. I’m pretty much over my time, so I will hand it back to Angela.
Thank you very much professor. And to our audience if you have any questions for Professor Zullo, please feel free to send those through the chat box. I see quite a few have come in and I encourage you to continue to do that. We’ll be getting to our Q&A session briefly. We do have another poll that we would like to ask you today. Michelle earlier had spoken a little bit about the two tracks that are available in this program, the taxation entity piece and the taxation of individuals. Please feel free to take a few moments to let us know which track you’re interested in. If you’re interested in both, you can also select that as an answer as well.
So, while we’re waiting for those responses to come in, I will now pass it back to Michelle to talk a little bit more about the admissions requirements for the program. Go ahead Michelle.
Thanks Angela. So essentially in regards to the admission requirements, we are looking for individual students who have an undergraduate degree from an accredited institution. We’re looking for approximately a 3.25 GPA or higher on a 4.0 scale. We also are looking for either an undergraduate or graduate course in taxation with the grade of 3.0 or higher on a 4.0 scale. And the other requirement is a minimum of two years of professional tax experience including one busy season. Or if you do hold the following credentials, like a J.D., a CPA, or CMP or are an enrolled agent.
Now in terms of the application requirements, we are taking applications for fall. Some of the documents that you need to put together in what the admissions committee will review, first of all is we need to see a current resume or a CV. We’re also looking for two professional recommendations. So, I do have these recommendations. They can come from your employer, managers, previous employers, colleagues or clients. I know that some students may – if they have their own business or CPA firm, two client recommendations are great as well. Or if individuals whom you’ve worked with, obviously that can comment on your tax work and tax knowledge.
The third document we’re looking for is an application essay telling us a little bit about your background, your motivations for pursuing the MS tax program. We also have a $100 application fee. The next document we also need are official transcripts. So, any coursework that you’ve done in the past, we do require all official transcripts from an undergraduate or graduate level.
Insofar as the information regarding tuition and scholarship, the tuition fees for Fall 2015 as you see on the slide, we’re looking at $1,476. That’s per credit hour. There are a total of 30 credits, so the overall tuition you’re looking at about $44,280 or close to about $45,000. I mentioned before that the application fee is about $100. Any type of additional fees on top of this would probably be
just your textbooks in course material. And I think that would range from $150 to about $200 per course. And again, we have 10 courses total.
Now Northeastern University in terms of scholarship is committed to supporting our veterans and the online program has recently become part of the yellow ribbon program. So if you do fall under this program, then it means that most, if not all of the tuition, will be covered by the government and/or this university. So, for more information, feel free to visit the website listed on the slide.
As part of our commitment to our lungs, beginning this fall as well, we have something called the Double Husky Scholarship. The D’Amore-McKim School of Business will now offer the scholarship to all Northeastern alumnus who have completed the degree program at one of our colleges. And in addition, if you do fall under this particular scholarship, the $100 application fee will be waived. Again, for more information, you can certainly visit our website, again, listed on this slide. And I would like to head it back over to Angela.
Thank you very much Michelle. What we’re gonna do now is go to our dedicated question and answer session. One of the first questions that we had come in earlier through the webinar was around the program itself and whether it can be completed part-time. So, I’ll had it over to Michelle to get started. Go ahead, Michelle.
Thanks Angela. This program, essentially, it is considered a part-time program. So, it’s a 16-month program minimum, and courses are taken only one course at a time and each course is five weeks. So, this program, ideally, is specifically catered to working tax professionals. So, a lot of the students are coming into the program, they do work full-time. Many of them have kids, family, and of course you’re doing taxes and you have different tax seasons throughout the year. So, it’s specifically designed for individuals who do work full-time and are able to do this online MST on a part-time basis.
Thanks Michelle. The next question that we have is around the difference of the masters of science and accounting, versus the masters of science and taxation. So, Professor Zullo, I’m gonna hand it off to you and Michelle, you’re more than welcome to answer this as well, but professor, with don’t we start with you? So, what’s the difference between the masters of science and accounting and the masters of science and taxation program? Go ahead professor.
That is an excellent question. Right now, I am also teaching in the masters of science and accounting program where we offer a tax concentration. So, I’ll preface this response by saying it really depends on where you received your masters of science and accounting. What I’m kind of addressing is what we do here at Northeastern. In the masters of science and accounting program, you can go through an entire masters of science and accounting program with one introductory type of tax course. And my guess is that in other universities, you could potentially have no tax work in an MSA.
But if you do have coursework in an MSA program, my sense and my current experience at Northeastern is that it’s less of a volume and it tends to be on the less technical sort of code headed side. When you start looking at the MST program, you’re going down a path where you’re really becoming very specialized in the area of tax. And you’ve kind of made the signal, you’ve sent the signal, I wanna be a tax professional, and that is kind of what I wanna do for the foreseeable future.
So in an MSA program, there’s going to be some tax exposure and some tax experience, but it’s not as intense. I’m not saying it’s not as rigorous, but it’s not as tax intense. Now, I guess if I could ask you a follow up question did you get your MSA at Northeastern or was it received someplace else? You know, then I’ll be able to better answer the question.
Thanks professor. And to our audience member, feel free to send in your response through the chat box and we can provide that to our panelist. Looks like our audience member responded professor and –
Yes, I see it, I see it. Yep. So, not having any experience with that university, I don’t know the answer. I mean I’d be happy to talk with you offline as far as what courses you’ve taken, what tax courses you’ve taken in your MSA program and get a sense as to how in depth they are. But my understanding of most MSA programs is you can either move into the – sort of like a little bit of a concentration where we give you sort of a little bit more of a taste of tax than on the accounting side and that’s kind of what we do here, but I’d be happy to talk to you about that in more, if you’d like. And Angela will give you my contact information.
Absolutely. So, I’ll send that over to you so you have his contact information. And I’ll had it over to Michelle as well. Michelle, did you wanna add anything to that question? You know, Michelle, we did have a question for you from one of our audience members. They were wondering if you’d talk a little bit about the difference between the two tracks.
Essentially the two tracks, taxation entities is more geared towards corporate tax. So, if students have not had an opportunity to take a look at our brochure information, the taxation entities focused a lot on corporate tax. So, there’s courses in advanced ______ entities, there’s courses in international inbound, outbound taxation. So, those are the courses that are part of the entity track, whereas the taxation of individuals, those are more focused towards – if you were working with individual clients and they range from courses like taxation, retirement, retirement plan, individual taxation. So, that’s more geared towards tax accountants or tax preparers who are more focused and want to learn more about individual tax. Now, sometimes I do hear students as well, are we able to take – to do a mix and match and end up taking courses from both the individual as well as the corporate track and yes, absolutely you can do that as well.
Thank you very much Michelle.
Michelle, can I jump in here a minute?
Okay, one thing I would say to the person who raised the question is you can go through your entire taxation career, 30, 40 years and never touch a corporate return, never work with entities. You can be in the area of high wealth individuals, individual planning, where you work with the shareholders and the partners of the business, but you never actually perform anything at the entity level.
On the other hand, you can go through your entire career working on corporate entities. So, a lot of people don’t understand that there’s the ability to get as narrow a focus as you want and there’s still plenty to do. So, I think that’s kind of the theory, and correct me if I’m wrong Michelle, but I think that’s kind of the theory behind having tracks. It’s where you’re interested in and where you think you might be able to provide value going forward in your career.
Michelle Yan: Absolutely. And that’s exactly a lot of times what students will ask. What do you think will be the direction for me to move into? And it really depends on each individual person’s career goals or what, perhaps, their firm or company has set out for them. And like you said, professors – it definitely is a mix of what are your __________ really want to move into and what you are interested in learning more about.
Great, thank you both very much. The next question that we have is for you Michelle. One of our audience members was wondering what’s the maximum amount of time that we have to complete the program and does it have to be completed within the 16-month timeframe or can it be completed over a 2-3 year period? Go ahead Michelle.
That’s a good question. So, minimum time to complete is around 16 months time frame. Maximum time you have about four years. So, we definitely try to make it very flexible and I know a lot of students pose this question to me as well because obviously if you’re a tax account, you’re a CPA you do a lot of taxes during tax season, things might be very hectic during that time. So, we are very flexible and we do certainly accommodate for tax season.
If you feel that during certain times of the year that busy season is just way to hectic, we do allow students to take breaks during that time and then jump back on once tax season is over. So, I find that some students may decide that they may want to spread the course out a little bit longer between 2 ½ or three years. So, that we can certainly do.
Thanks Michelle. The next question that we have is for you professor. One of our audience members wanted to know will credits earned in the masters of science and taxation program count towards continuing education for EA or CPA designations? Go ahead professor.
What I can tell you is, again I’m speaking with my experience in Massachusetts and I’m guessing that states are the same. This is an area that is covered by your state licensing board. Now as a CPA in Massachusetts, when I was getting my MST degree, those courses did count towards my attendance at seminars. So, in other words, for everybody’s knowledge, when you become a CPA and an enrolled agent, you’re required to do a minimum amount of continuing education. It’s like continuing law units, continuing accounting CPE, you’re required to do that based on the licensing requirements of your state.
My guess, and this is not a firm answer, my guess is that in most states it will. It definitely does in Massachusetts. The EA is a federal designation, not a state designation, and my guess is that the IRS will allow the MST courses. One thing I might be cautioning you on is that there may be an upper limit as to how much they can count for. But my guess is that they will account for something. And I know in Massachusetts, they do count. But I would check with your state board.
That’s a good recommendation. So, to our audience member, feel free to check with your state board, or if you have a follow up question, feel free to send it through and we’ll be more than happy to answer it. The next question that we have is for you Michelle. One of our audience members was wondering if we complete the online masters of science and taxation program, how can we network and acquire resources for perhaps career services? Do we need to physically be on campus for those services? Go ahead Michelle.
Thanks Angela. For the online MS tax program, there are a good amount of ways to network. As I mentioned before, some of the coursework within the program allows for students to communicate on the discussion boards. So, a professor may even post a specific topic online and need to answer this particular discussion forum and usually by the next day, they’ll say it came to respond to one of the classmate’s discussion. So, it kind of generates a discussion where students are able to go back and forth in terms of their topic at hand.
And the other areas of networking opportunities is a lot of students also have an opportunity to work in group work. And I think Professor Zullo might have a better answer to this as well. But what I gather from the online MS tax program is each of the courses are students enrolled in each of the courses are about 15, 18 students. So, they’re fairly intimate, fairly small. So, you do have a good opportunity to do the work with individuals within that course.
And within the group setting, sometimes they further group you down to three or four individuals. You have a great way to be able to work on case cites together. Most of the students in the program will communicate through emails, phone calls, conference calls. And the type of platform that you’re using. I know we haven’t covered that information today, but we use Blackboard as our student platform. There is an opportunity there for individuals to actually speak just like as we are now to each other online through a channel where you’re able to communicate that way.
So there are a lot of opportunities to network with fellow classmates. We have students coming from essentially all over the U.S., east coast to the west coast and I have many students also in the past who are – internationally as well, from Canada, Germany, Netherlands, you have a good amount of international exposure that way as well.
I’m just taking a look at the full question. Any resources regarding jobs, internships –.This type of a program is more catered towards working tax professionals. So, a lot of the individual students in the program, they do have positions and so forth available already. But we do have a career center that students are able to take advantage of while they’re in the program. And they do offer a lot of resources that the online students have certainly a lot of accessibility to as well. So, I would recommend the career center that we have. And Northeastern is also offered to the online students for the MST program as well.
Ronald Zullo: Michelle, can I just comment on collaboration?
Michelle Yan: Absolutely.
Okay, in terms of the earlier part of the question, which had to do with students getting to know each other and working in groups. In this particular class, we tend to group students in groups of three or four. Now, feedback that I’ve received from students is that many of the students are all in the same cohort. So, they’re kind of all moving through the program together, so you get to see the same people over and over again. And you sometimes get in the same groups with them. And that creates opportunities where I’m in Boston and I’ll know somebody on the west coast.
Or two offerings ago I had a student in Germany. So, when I was doing my weekly discussion it was some ungodly hour at the moment, so he was never able to be there live, but students find all kinds of ways to communicate with each other. They sometimes use the Blackboard platform, but they’ll also go out and find other discussion boards and do texting and phone calls. And what I’ve heard from a couple of students is I’m gonna keep in touch with these people. Not always. I’m not gonna lie.
There are bad group experiences. I’ve dealt with one. But there are – I never wanna work with this person again for the rest of my life. It happens. But most of the feedback that I’ve heard is these are the kind of people I’m gonna keep in touch with and I’m gonna reach out to them. And as you move through the program, you start to see some of the same people and the same names. And it’s not like being in a dormitory where you can look at your roommate and say hey do you have professor so and so? What’s going on in his class? It’s more about you have to do this in an online way. So, as long as you’re comfortable with technology, and I’m in my late 40s, so technology, I’m still dealing with some issues. But for people that are very comfortable with technology, it’s like being next door to them, even if they’re in Germany. So, take from that what you will.
Great, thank you very much professor. One of our follow up questions from students is around opportunities that are available to students after they graduate from the program. So, Michelle, I’m wondering if you can talk a little bit about – and also the professor, why don’t we start with you professor around what careers and what opportunities have students pursued once they’ve graduated from the taxation program?
Well, most of my experience with students, as Michelle pointed out, are working professionals. So, I’ve had students that have come to the program because they either don’t like what they’re doing, meaning they’re on the auditing or accounting side, they don’t like what they’re doing and they wanna demonstrate a serious commitment to move over to the tax side. Those are your bigger firms where they have a dedicated audit side and a dedicated tax side.
For other students its I’ve been working in tax for 5-7 years and I feel like I know how to fill out a tax return, I feel like I know how to do the forms, but I don’t understand the theory. I’m sort of acting like a monkey, I’m just putting numbers in boxes. So, I wanna gain an understanding from a theoretical point of view as to why I’m doing what I’m doing.
In terms of somebody coming out of the program looking for employment, I would say there are the traditional roles of working in one of the big firms or national firms in their tax department. But also if you have a strong accounting background such as the person who was talking about having an MSA and then wanting to get an MST, you could certainly escalate quickly through a mid to small size firm as somebody that can be on both sides of the situation.
Because when I got into practice, it was really just audit tax. Now they have audit tax consulting, business services, financial services, small business, medium business, large business. So, certainly an MST degree – let me say it this way. If you’re taking an MST degree for fun because I just wanna learn about the tax, I have no aspirations to work in tax. I don’t wanna work in tax. I think you’re making a mistake.
So, you should definitely have your eye on moving into a tax position or moving up in your current tax position. As much as I love tax and I get excited and I’m jumping off my chair right now, most people don’t find tax that exciting. So, if you’re doing this for fun, I wish you well, but I can’t really understand you.
I think that’s an interesting point. I’ve encountered students in the past – I mean I know we’ve talked a lot about students who work in mid-size and large size and small size _____ firms. But I’ve also run into a lot individual students who have their own business. They’re just starting out, one or two years. They’ve developed a small CP firm themselves. And a lot of them are sole proprietors or small partnerships.
And the interesting thing with these type of individuals as well, I have a CPA, I’ve worked for the big four for about 15 years and now I’m off myself starting on my own, small CPA firm, I’ve been in here for about three or four years. I think the attraction to the MST program is yes you have all that experience which is obviously fantastic, you had your CPA license. But sometimes, some entrepreneurs may lack that ability to communicate with professionals of their kind.
So, some individuals may say well if you put even five CPAs in a room, give them a particular case, like Professor Zullo had in this particular webinar, you could very well come back out with five different solutions. And that’s the interesting part of having this MST program is students being able to collaborate and communicate with each other and sort of discuss what is the right way to do things? Is there a right way to do things? I think the interesting thing is what the MST program allows you to open up your way of thinking and perhaps create more strategies for yourself for that, you are able to service your clients better.
I couldn’t agree with you more Michelle. I couldn’t agree with you more. I couldn’t have said it better.
Michelle Yan: Thanks Professor Zullo.
Angela LaGamba: Okay, well thank you –
Obviously I’m not following up with what Michelle said, so I must entirely agree with it.
Well thank you both very much. The next question that I have for you Michelle, one of our audience members was wondering around to which and what is the process of applying for student loans or financing?
So for student loans, for students wanting to come back graduate school or take this online MS tax program, we do work with FASA. And students are able to apply to something called Graduate Stafford Loans. Graduate Stafford Loans will offer up to a maximum of about $20,500 per year. So, you are able to apply to student loans through this particular channel. If you have any additional questions regarding financial aid, feel free to reach out to your enrollment advisor or send myself an email. My information is on there as well, and we can certainly talk more about funding options and future loan options as well.
Thank you very much Michelle. The next question that we have is for you professor. One of our audience members was wondering if you would have reached the same conclusion in the court case that you profiled today in the federal tax course. Would that have been the same conclusion as the court?
In this particular case, yes I would have. But I wanna make it very clear that there are a variety of cases that we do talk about during the semester and I often go to the students and I say, now what do you think the right answer is? And this is a weird thing for the tax guy to say, but let’s put aside the tax law for a minute, what do you think the equitable or right answer is? And we’ll have a discussion and I’ll say well, in this particular case, I don’t agree with what the court did, but I understand why the law forces them to do what they do.
So in the Cesarini case, which I absolutely love this case. I make sure thatin any course that I teach I’m able to sneak it in, whether it’s graduate or undergraduate because there’s a lot of different layers. But in this particular case, the concept of what gross income is is very clear. And it’s pretty much that if you can’t find a way to exclude it, you can’t find a legal way to exclude it and you’ve been enriched in some way, you have gross income. And it’s that simple, but it’s also that complicated. So in this particular case, yes I would have come down in the same exact place as the court.
Thank you very much professor. That is all the time that we have for today. I just wanted to open it up to both you professor and Michelle to see if you had any final thoughts. Go ahead professor.
Anything I can do to help people, we are holding a session coming up this fall. The more information you have about how the program is structured and what the expectations are, the better off you are. The people that are afraid to ask questions, they’re afraid to come forward, they’re afraid to rely on us, I mean the way the course is taught, and maybe I didn’t mention this, the way the course is taught, it’s taught with myself, a lead instructor, then a course facilitator. And between the two of us, in those five weeks, reach out to us in any way that you need to. If there’s a way that we can help you, we will.
Now, that having been said, we’re not gonna relax the standards, we’re not going to make life easy for you, but if you don’t understand something and you’re just sitting there suffering, well I would ask you to not do that. So, utilize the tools that you have, the online material, the two dedicated instructors and 99.9% of the time we’ll be able to help you. If not, it’s probably an administrative question and we’ll refer you to one of the administrative people.
But don’t be bashful, it’s five weeks. Soak up as much knowledge as you can and stay on top of things. Biggest thing I can tell you is stay ahead, don’t relax. At the end of five weeks, you can take a break for a couple of days, depending on how your schedule is, but get the most out of it and be committed. Thank you, and I appreciate all this time that we spent together. Back to you Angela.
Thanks professor. I would like to thank all our attendees for coming to the webinar today.
If you do have any additional questions or would like to apply to the program or any questions regarding start term, feel free to email myself. The email’s up there, my extension is up there. So, feel free to let us know if you have any additional questions, if we weren’t able to answer any of your questions today.
Great. Well, thank you very much professor and Michelle for walking us through the course and the online master of science and taxation program. We’ve had some great concepts that we’ve learned about today and also some excellent questions from the audience. Like Michelle said, if you walk away from this webinar and you have some follow up questions, feel free to reach out to Michelle and we will get back to you and make sure we answer your questions. And again, thanks to everyone for joining us today and have a wonderful afternoon everyone. Take care.
[End of Audio]
In this webinar, Matthew discusses why he chose to pursue his Online Master of Science in Taxation and how he is enjoying the program so far. He also talks about balancing life and work while earning his degree from overseas.
Angela LaGamba: Hi everyone. Welcome to Northeastern University’s Online Master of Science in Taxation webinar. My name is Angela and I will be your moderator for today. Before we begin, I’d like to go over some logistics for this presentation and also address some commonly ask questions that you might have. So for today, we encourage you to ask questions. If you have any of them, you can send them through the Q&A box located on the left-hand side of your screen. And we will also be taking those questions and addressing them throughout the dedicated Q&A session.
We also make sure to turn off your computer speakers. You are going to be listening through your computer. And this session will be recorded so you can listen to it again at a future time. I’d like to introduce you to our two panelists today. We have Matthew Hitchcock, Michelle Yan and myself Angela LaGamba. I’m your host and moderator. Matthew is a student in Northeastern University’s Online Master of Science in Taxation, and he’ll be sharing his student experience with you today and we’ll have a more of a detailed introduction for Matthew later on in the presentation.
We also have Michelle Yan. She’s an enrollment advisor on Northeastern University’s online Master of Science in Taxation. And her role is to help prospective students through the application and admissions process. All right, so you may be wondering what are we going to be talking about today in the webinar? We’re going to be covering a number of items, but we’re going to start by giving you an introduction at Northeastern University. You’re gonna learn a bit more about our online Master of Science in Taxation program. And then Matthew is gonna be talking about his experience as a student in our hear from a student section. And then Michelle will be chatting with us about the admissions requirements, the tuition and fees requires for the program. And then we will also have our dedicated Q&A session at the end. And again, feel free to send in those questions because we will be addressing that during the Q&A. Without further adieu, I’d like to hand it over to Michelle Yan, our enrollment advisor to tell us more about working for university. Go ahead Michelle.
Michelle Yan: Our Online Master of Science in Taxation is part of the D’Amore-McKim School of Business. It was established in 1922, has a rich history, a strong reputation for scholarly research and teaching excellence. Building on high academic achievement, wide ranging work and consulting experience, rich diversity and our extensive corporate ties, D’Amore-McKim School of Business faculty members are leaders in their field and regularly receive worldwide recognition and awards for their contributions to theory and the practice of management.
We do have a global network of over 200,000 Northeastern alumni, spanning more than 50 countries. Please like China, Canada, India, England, Germany and Australia to name a few. Almost 90% of our students pursuing graduate business degrees have work experience. So, our programs are very accommodating and flexible.
Now in this slide, we show a little bit of rankings and our accreditation. We are accredited by AACSB International, one of the highest business accreditations worldwide. Most recently, Northeastern University’s online graduate business programs was ranked no. 17 in the U.S. by U.S. News & World Report. This does also include our Online Master of Science in Taxation at Northeastern University.
Now a little bit about the program itself. The Online Master of Science in Taxation was designed with the working tax professional in mind. The coursework is 100% online with no residency requirements. The program can be completed as little as 16-18 months. There are 10 courses and typically taking only one course at a time. Now in this program, we do offer two specialty tracks, taxation and entities and taxation of individuals. The program is structured to increase your technical tax knowledge, sharpen your research skills, keep up to date with tax laws and analyze the complex regulations, related casings and rulings.
The good thing with our program is that the GMAT and the GRE is not a necessary requirement for our program. With our program we tend to really focus on the tax work experience. And so there are also a variety of different tax professionals coming into the program and we have students coming from all public accounting firms, private industry, there are individuals coming from the IRS and of course the big four firms as well. So, it is a fantastic opportunity to collaborate on cases, trade ideas, learn from each other and develop strong networking opportunities with fellow colleagues in the program as well.
Now at this point, I would like to introduce you to our student spotlight portion of the webinar, Matthew Hitchcock and Matthew Hitchock is a student at Northeastern University’s Online Master of Science in Taxation. He obtained a BBA in Accounting. His first position out of school was at the Internal Revenue Service as a field revenue agent where he conducted audits of high net worth individuals and the closely held businesses and became licensed as a CPA.
Next, Matthew took a position as a tax staff at Ernst & Young in Germany in their U.S. tax department in 2011. He is currently with KPMG in a senior tax staff role in their U.S. tax department. His primary practice area is international tax consulting and compliance with a strong focus on in bound investment by German companies. So Matthew, thank you so much for joining us today.
Matt Hitchcock: Yeah, no problem, thanks Michelle for having me.
Michelle Yan: Great. And in the next couple of slides, I will be posing sort of a set of questions Matthew to you that we feel that many prospective students want to learn more about. So Matt, feel free to explain or expand on your experience and your take on Northeastern’s Online MST. So the first question that we have in relation to your career and educational background, how has your career and educational background made you a good fit for the program?
Matt Hitchcock: That’s a good question. I think where we’re really trying to get with this is kind of what was my thought process? Why did I want to get a Master’s of Science in Taxation? As you mentioned out of school, I started with the Internal Revenue Service as a field revenue agent where I conducted audits. The question comes up how did you end up in Germany? My wife is German and wanted to study over here in Germany and get her master’s and I kind of jokingly told her that if I find a job over there, that I will go and join her. And it ended up working out. I took a position with Ernst & Young and then as an associate tax staff in a U.S. tax department in Frankfurt, Germany. And then subsequently got an offer at KPMG where I currently have been for about the last three years.
So my thought process of why I wanted to get an MST was as I progressed up the career ladder, I started getting more and more technically involved with cases that were maybe a little bit out of my experience range. And what I really wanted to do was focus on my tax technical knowledge, but also get a broad overview of the different types of tax that maybe I hadn’t been exposed to.
So my thought process was getting an MST was basically I wanna expound and expand my technical expertise in my particular practice area. But I also wanna be able to practice outside of other areas. In the internal tax areas, you guys can probably imagine there’s been a significant amount of growth with respect to recently issued legislation, whether it’s SATCA or the new withholding regulations that have really put a burden on the international taxation field. And my goal with getting an MST was to expand on my technical knowledge and be able to better serve our client.
Michelle Yan: Wonderful. So, with your background coming in, I guess, what made you feel that maybe you would think that you would be able to handle an MST program like this? Do you think that your background prepared you?
Matt Hitchcock: Yeah, I think my background prepared me great. And actually also give me the kind of push that I really wanted to pursue a Master’s program in the area. The experience that I gained going into the program has definitely helped me while in the program. But I’ve also noticed that the collaboration with people that maybe come from industry or I currently have someone that was a state tax auditor in one of my classes has really been a good fit to be able to bounce ideas off of each other.
Michelle Yan: The next question I have for you Matt deals with the program or the curriculum itself. So, what made this program, Northeastern’s online MS tax program stand out when choosing a school to pursue your degree?
Matt Hitchcock: Yeah, so what made Northeastern stand out to me was a couple things. The first thing is being over in Frankfurt, Germany, the option of having an on ground Master’s of Science in U.S. Taxation doesn’t really exist. So, that limited me to online programs. And I did a pretty significant amount of research before deciding to go with MST. What ultimately pushed me to choose Northeastern as opposed to some of the other Online MSTs that are offered with the curriculum. I felt like from what I had seen both working at the IRS and also in public accounting, the concept of the core curriculum and the fact that you had the choice to kind of go in one direction or another for me it was the entity direction was really key. This is something that Northeastern offered that I didn’t really feel was well offered at the other programs.
I also really liked the fact that there were two international tax classes that were offered that I would be able to take and since this is my primary area of practice, that’s kind of where I wanted to focus my studies on. And Northeastern’s program allowed me to do that.
Michelle Yan: Great, wonderful. The next question I have you deals with time commitment. As we all know tax professionals are very busy. I mean a lot of times they have to sort of juggle and balance school, work, family and of course many CPs are now coming to the tax season. So, I just wanted to get an idea from you Matt, what is it like to complete the program while working and also balancing, you know sort of different obligations in your life?
Matt Hitchcock: Yeah. This is a really good question. The one thing that I will have to say about doing this program online as opposed to perhaps being on an on campus course is the ability to manage your schedule around your classes, or your classes around your schedule, however it may be. With the ability to look and view lectures at a later point in time, a lot of the courses, I think actually every course that I’ve had so far has had live sessions that are all recorded that I can go back and look at – obviously the time difference for me is a big issue. Most of the time when these live sessions are offered, I’m hopefully in bed sleeping by then. But it’s nice to be able to basically progress at my own pace and really complete the work when I need to and when I have time to.
From an overall time commitment, I think it’s really varied by class. I had a little bit of initial shock with the first class. I think I probably spent I would say around 20-25 hours in that first federal principle class. For some reason, I got the impression when I was going through that that that was the weed out class of the program. But it was actually really good. It was really well put together and I would say on average – again it depends on what area you’re coming from. For instance, if you have experience in say international tax, that will perhaps make the time commitment a little bit less on this class than for me state and local taxation which I have almost no experience in.
But I think it’s pretty safe to say that I’ve averaged anywhere between 12-18 hours a week on all of the classes. And with juggling the whole work/life balance concept, life I can kind of scratch out of that equation. I think that’s just the nature of working in public accounting, having busy season and trying to complete a master’s degree in 15 months. But I think that’s also okay because the program is short. It’s come in, learn the stuff, get your degree, have a nice day. And that’s one thing that really attracted me to the program.
Michelle Yan: Great, great. And actually I have a quick follow up question to that. How do you find the rigor of the program, the content, the material, and as it relates to your job?
Matt Hitchcock: Yeah. I have found all of the classes to be very eye opening. I think it’s always really interesting to take a class and hear a professor who maybe has experience in an area that’s perhaps the same area as yours, but a different angle on it. It’s always fascinating to me the things that come up that you’re like huh, why haven’t I heard of that before? Yeah, I have found the rigor and the material, in general, to be very well put together. And I can say I’ve taken a lot out of the program.
Michelle Yan: Great, great. Okay, the next question I have for you deals with online learning. Now, I know a lot of students that are, perhaps, considering the program, it’s their first time coming into an online program in terms of the technology wise and they’re not sure what to expect. So, the first question I have for you is how does – well, first of all what is it like to learn online and the second question is how does the student faculty interaction occur in the online program?
Matt Hitchcock: Yeah, sure that’s also a valid question I ask myself when I started. Luckily in my undergraduate program I had used the software before. All of the classes are run through the blackboard platforms. So, I had a little bit of experience with how an online class progressed and worked prior to coming into the program. I had a little bit of an idea of what to expect. So, I think the learning curve jumping in for me really wasn’t that big of a deal. But again, I think in general, I’ve never at any point in time in the program felt like I didn’t know what I was supposed to be doing. Things have been very well laid out and pretty self-explanatory with what’s expected.
And one thing that is nice when I have had a question I get almost immediate responses from the professors and this has been really, really awesome for me because I remember I had an inbound taxation class and this is one of my primary practice areas. I think the professor probably hated me because I would email him three or four times a week asking just random questions that I personally thought interesting that may have related to the material but probably not to the degree that he was interested in. But he always got back to me very quickly, I would say within a day, answering my questions, explaining it further. To be honest, I think this is probably better interaction than I had even when I was in my undergrad in an on ground program.
Michelle Yan: Okay great, especially with yourself being in Germany, I can see that there will be opportunities in the class where you are doing group work. So, as a follow up question, tell us a little bit about in terms of how the group interaction – how does that work with you being in Germany and also completing assignments that were sort of a group oriented assignment?
Matt Hitchcock: Yeah, so I think really there was only one class where I had, what I would consider to be substantial group work where there was some coordination going on with the times that we would be able to get together. A lot of the group work is not such that you need to necessarily be together and deliver together. A lot of group work more revolves around discussion board posts. So, if I post something, it’s gonna stay there and usually there’s a deadline by when something is due. But the time difference doesn’t really create some kind of a big issue because the stuff just stays on blackboard.
So, I personally haven’t had any problems with the group work. I know in the first class we ended up having weekly skype sessions with our group members to kind of sit down and talk through who was gonna do what on projects and yeah in general I found the group work to be very great. I thought it was kind of fascinating. It was the first time that I’ve ever been in an educational setting where I actually felt like my group members were pulling their weight. I’ve had a positive experience so far with group work and I think if anyone would have problems with this, this would be me with my six hour time difference.
Michelle Yan: And then the question that I have for you sort of comes back to in terms of where you are right now in terms of your professional career. How has a program, first of all, helped your current role within your firm? What has it done in terms of with the professional career, how has it helped you so far?
Matt Hitchcock: Yeah, that’s a great question. I think hands down the biggest difference that I’ve seen since starting the program is the amount of responsibility that I’ve been given. Since starting the program, I’ve been able to work on projects that probably perhaps before the program I wouldn’t have been working on. And I’ve been given a lot of responsibility. And one of the things that I really like about the program and actually was one of the reasons why I decided to get an MST was to develop kind of a broad framework of each individual area, but also the taxation system as a whole. And what I’ve found is that this program through the core courses and then also the later elective courses, I’ve really been able to get to the point where I can recognize issues that I wouldn’t have recognized before that I may not know the answer to but I have a framework with which I can operate.
And the research class has also been very good in equipping me to be able to efficiently and effectively find answers with the various tax research software. So, I think probably the most noticeable thing has been – you know I’ve received increased responsibility in my role. And then I’ve also been able to develop a significant amount of business as a result of taking this program. Often times when you’re dealing with a client, either in a consulting or in a compliance aspect, things will naturally pop up when you recognize that an issue exists, and a lot of times this leads to other questions that need to kind of be fleshed out further. And for me, I’ve been able to identify consulting opportunities for some of our clients that have lead to increased business.
Michelle Yan: Great, that’s wonderful. So at this point, those are the questions we have for you today Matt and definitely continue staying on the line here, ‘cause what we’re gonna do is we’re gonna sort of go back into talking a little bit more regarding the admission requirements for the program itself and then towards the end of the presentation, we’ll open up the floor in terms of individuals that are joining us today to ask questions and there’s a chat box where they can actually type questions, so we’ll have a Q&A session towards the end.
Matt Hitchcock: Okay, excellent.
Michelle Yan: Great. Now, admission requirements for the online MS in tax program, first of all, we do require students coming in to have an undergraduate degree from an accredited institution. GPA requirement we’re looking for is about a 3.25 out of a 4.0. We are looking for an undergraduate or graduate course in tax with a grade of 3.0 or higher out of a 4.0 scale. Typically, we are looking for individuals coming in with the minimum of two years of professional tax experience, including a busy season or over the phone credentials such as a J.D., a CPA, CFP or enrolled agent.
When speaking regarding the application requirements, typically we are looking for an up-to-date resume, two professional recommendations. So, typically when we see professional recommendations, we’re looking from your employer, it could be a colleague and of course I know that many tax professionals they have their own firms. We can also take them from their clients as well.
There is an application essay that students need to put together. There is also a $100 application fee with an online application as well. We do need all official transcripts, either undergraduate or graduate work and those candidates that their undergraduate instruction was not conducted in English may need to submit a TOFL score as well.
Now the tuition for Northeastern’s online MS in tax program you can see some of the fees involved. As I mentioned before, there is an application fee of $100. The course tuition you’re looking at is $1,476 per credit hour. There are a total of 30 credits, and so overall tuition you’re looking at about 44,280. And again, there’s a total of 10 courses. So, these are the tuition and fees. Typically, any other associated costs along with it I would say would only be course material and textbooks and probably allocate average about $200, $250 per course, and of course that’s times 10 courses when it comes to course textbooks.
I would also like to talk a little bit about some other scholarship opportunity that we do have available at Northeastern and the first one is a yellow ribbon program. Now Northeastern University is committed to supporting our veterans and the online program has recently become part of the yellow ribbon program. If you do fall under this program, then it means that most, if not all of your tuition will be covered by the government and Northeastern University. For more information regarding the yellow ribbon program, please do visit the website listed on the slide.
The second scholarship that we do have available, as part of our commitment to our alums, beginning Fall, 2015, so last fall, the D’Amore-McKim School of Business will now offer something called the Double Husky Scholarship to all Northeastern alums who have completed a degree at one of our colleges. This offer does include a 25% discount on tuition. In addition, the $100 application fee is waived, and of course, again, for more information, please do visit the website that’s listed on this slide.
Last but not least, Northeastern does also offer something called the lifetime learning membership and it is available to families of currently enrolled full-time students. So, currently enrolled full-time students means they’re full-time undergraduate students currently studying at Northeastern and their family members of these students can take advantage of something called lifetime learning memberships. They are able to take advantage of a 25% discount on tuition. Again, for more information, the website is also listed below and you can take a look at that website. At this point, I would like to hand it over back to Angela.
Angela LaGamba: Great, thank you very much Michelle and Matt for walking us through the program and the student experience. What we’re gonna do now is open the floor up for questions. This is our dedicated Q&A session. I’ve seen that a couple of questions have come in through the Q&A chat box, but I encourage our audience to continue to send in those questions and Matt and Michelle are available live right now to give you some answers. So, why don’t we start off with our question from Melissa. Melissa had logged in and was asking how often do you have to log onto the computer for class and how long does it take to get the degree and what’s the cost? So, Michelle, why don’t we start with you and we’ll have Matt add to that. Michelle, go ahead.
Michelle Yan: So, I’ll discuss the last two questions Melissa. So, your question was how long does it take to get the degree? So, the program itself, you can complete the degree in a minimum of 16 months. In 16 months, there are 10 courses. Courses are taken one course at a time and each course is five weeks. So, it is considered a little bit more of an accelerated program because the timeframe to complete the courses is relatively short by the set of time. But as you’ve heard from Matt and a lot of the students that are attending the program, they feel that this is a really great way – you have an accelerated course where you’re only focusing on that one course. So I find that a lot of my students really enjoy the schedule.
So again it is a minimum of 16 months. Now, I know a lot of tax professionals, they work through two busy seasons and so forth so things are hectic. And I think what one of sort of the follow up answers to that is if students are able to take breaks between courses and certainly you are able to, we do allow for students to complete the program in a maximum of four years. So, maximum time to complete is four years, so during times throughout the year, things were hectic, you were running into busy season, you planned a family vacation and so forth, there is flexibility for students to take breaks in between classes.
And the cost of the program, we did address that in our tuition section and the tuition was 1,476 a credit hour. Thirty credit hours overall, so you’re looking at about $44,280. So essentially one class, three credits you’re looking to pay about $4,420 per course. In regards to the first question, maybe that question Matt you can address the question again how often do you have to log onto the computer for class?
Matt Hitchcock: Yeah, sure. Yeah, Melissa, it really depends on the class. A lot of the course material – really the only reason why you need to log on is to submit your homework assignments and then also to pull down the videos or the presentations that are given by the professors. I would say it depends on the class. For me, personally, I find it pretty easy to just keep up on the screen. I actually have a second monitor, I keep the blackboard application on the screen, just in cases where there are discussion board posts. A lot of times I find with the time difference it’s nice if someone happens to get online and put something just to quickly respond back because that may be the only time that I actually am able to get them live because of the time difference. But I guess, in general, I would say once a day would be more than sufficient. But again, I think that’s dependent upon the course you’re taking.
Michelle Yan: Yeah, and I’d like to add to that as well Matt. So, exactly what Matt said, I mean depending on – in terms of the week’s deliverables. So, every time when you do log in, you have access to your schedule for the week. For the course schedule or course syllabus, it’ll indicate to you okay, week one how many chapters you need to read, when you’re assignments are due, when your cases are due. So, a lot of times, there’s no sort of specific time that you have to be logged on sitting in front of your computer. Any time you log on, you will have access to all of your course, information, assignments, cases, exams and so forth. And so a lot of times, when you do log in is if you’re prepared to answer a post or you wanna review course notes that are on the slide deck in each of the weeks, that’s when you would log in.
So a lot of times most students – I find that depending on your schedule like Matt mentioned, I mean some students may work on their homework and their assignments on the evenings, after you get back from work, have dinner, do whatever errands you need to do and I find a lot of students, especially those students that have kids as well, they’ll sit at the computer at probably 9:00 in the evening. And every evening, you’ll go sort of study and read for about three hours a night. So it really depends on what you’re more comfortable. Some students say if I have a lunch hour I might log in and do some reading. But there’s no sort of required number of login times that you need to be in front of the computer.
Angela LaGamba: Thank you very much Matt and Michelle. The next question that we have is if I take one course each semester, how long will it take for me to complete the program? This question is from Adrian. Michelle, why don’t we start with you?
Michelle Yan: Regarding the courses, so I just wanted to clarify that the way we structure our courses, you can think of it as a trimester, so January to April is our Spring. April to August is our Summer. August to December is our Fall semester. But essentially what happens, because our courses are only five weeks at a time, so essentially if you’re seeing that I’m taking one course per semester, you’ll do five weeks and you’ll essentially offer two or three months after that. And so it does depend on your schedule.
A lot of times we do recommend that there is a certain structure that we would like students to take the courses. So for example, most students will need to complete all of their core courses before moving onto your electives. But depending on your schedule, depending on busy season or traveling and so forth, I always encourage my students to work with their student services advisor. So, once you’re in the program, you work very closely with your student advisor to create a customized schedule for yourself. And depending on when the courses are offered, they will let you know in terms of when the classes are held, which semester, which terms. So, essentially with each semester, students can take up to two or three courses.
Again, it’s one after the other because you’re only taking one course at a time and each course is five weeks. But like I said, minimum time to complete is 16 months. Maximum time is four years. So depending on when the courses are offered, we do always recommend you either work with your student or business advisors so you have a much clearer picture of that.
Angela LaGamba: Thank you Michelle. The next question is for you Matt. Matt, one of our audience members wanted to know what opportunities you may be looking to complete after you’ve completed your degree.
Matt Hitchcock: Yeah, great question. At this point, I have no plans. I plan on at least staying in public accounting. I think there’s, at least in my current role of pretty good opportunities to expand into perhaps a management role and who knows, depending upon how business develops, work the public accounting ladder. At this point, I have no plans of whether or not I will stay in Germany in my entire life and continue to practice U.S. tax here or perhaps move back to the States at some point and practice public accounting back in the States. But I’m really confident that no matter what I decide I would like to do, I think I’ll be in a pretty good position with my experience and then also with the knowledge that I’ve gained in the master’s to be able to pursue whatever opportunity comes up.
Angela LaGamba: Great, thank you very much Matt. We had a follow up question from our audience wanting to know what your classes are like and when you’re networking with your fellow peers, what are their backgrounds like? Other jobs, industries and what backgrounds they come from. Maybe you could share a little bit about that. Go ahead Matt.
Matt Hitchcock: Yeah, sure. It’s been pretty varied. I’ve had everything from State auditors. Interestingly enough, I actually met someone from my own company, KPMG, that’s in the New Jersey office in one of our classes. I’ve had a couple of state auditors in the class. It’s been a pretty broad range of people from public accounting, industry and then also the governmental agencies. So, I think kind of the main thing is basically everyone has a tax background at least that I’ve met within the program so far.
Angela LaGamba: Great, thank you Matt. That’s it for questions from our audience. If you have any additional questions please feel free to follow up with Michelle. We’ve put Michelle’s contact information up on the slide. And Michelle, before we log off, maybe you could talk a little bit about the upcoming application and start date.
Michelle Yan: Sure, Angela. So, our next start dates coming up for the online MS in tax program begins in Summer, so it’s May 2. So, we do actually take a break before sort of the mid-March and end of April timeframe, ‘cause I know many tax professionals are sort of busy with their tax season coming into it now. So, we do offer start dates in the summer that begins on May 2. Hopefully many of you have had a little bit of a break after completing your individual returns and so forth. So, May 2 is the next summer start, and the one after that is also June 13. And those are the application deadlines as well.
I always encourage my students to complete their application ahead of time if they can because the faster you can complete the recommendations, the admissions committee, they’ll take a look at it first. So, those are the application deadlines and again the start date is May 2 and June 13. And of course if there is any additional questions that you have, my contact information is listed on the slide as well, email, phone number, as well as an extension. So, feel free to reach out any time.
Angela LaGamba: Great, thank you very much Michelle and Matt for taking the time today to walk us through the Online Master of Science in Taxation and Matt for talking about your experience in the program as a student. If you have any other questions, like Michelle said, feel free to reach out. But if not, this concludes our session for today and have a great day everyone.
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In this webinar, Professor Timothy Gagnon talks about the Online Master of Science in Taxation program and more specifically the Generation Skipping Tax course. He covers the history, evolution, and current state of generation skipping tax practices and policies.
We’re also excited about our full house of panelists for today. Professor Timothy Gagnon is a Faculty Director for the Online Master of Science and Taxation and also a former partner at Coleman & Gagnon.
Michelle Yan is our Enrollment Advisor with Northeastern University’s Online Master of Science and Taxation and her role is to help prospective students through the application and admissions process. And as we go through the webinar, our panelists will also have the chance to further introduce them so you get to know them as well.
If you have any specific questions for the panelists themselves, just feel free to type their name beside your question so that we can direct it to the correct panelist. All right, let’s get started. We are going to be covering a number of different things today. We’re going to talk about Northeastern University and the D’Amore-McKim School of Business. Michelle will tell us a little bit more about the online Master of Science and Taxation. And then Professor Gagnon will provide us with insights into generation skipping tax.
I will hand it back to Michelle to tell us a bit more bout admissions requirements and tuition fees. And like I mentioned earlier, we’re also going to have that dedicated Q&A session for you. At this point, I’m going to hand it over to Michelle to tell us a little bit more about Northeastern University. Go ahead Michelle.
Michelle Yan: Our Master of Science in Taxation program is part of the D’Amore-McKim School of Business. It was established in 1922 and has a rich history, a strong reputation for scholarly research and teaching excellence. Building on high academic achievement, wide ranging work and consulting experience, rich diversity and our extensive corporate ties, D’Amore-McKim School of Business faculty members are leaders in their field and regularly receive worldwide recognition and awards for their contributions to theory and the practice of management.
Now, we do have a global network of over 200,000 Northeastern alumni spanning more than 15 countries. Like places in China, Canada, India, England, Germany and Australia to name a few. And almost 90% of our students pursuing graduate business degrees have work experience. So, our programs are very accommodating and flexible.
Now, we are accredited by the AACSB International, which is one of the highest business accreditations worldwide. And most recently, Northeastern University’s online graduate business programs was ranked no. 18 in the U.S. in 2016 by U.S. News & World Report. And this does also include the online MS and taxation program.
Now a little bit about the online MS and tax program. It was designed with the working tax professional in mind. The coursework itself is 100% online with no residency requirements. The program can be completed as little as 16-18 months. There are about 10 courses and they’re taken only one course at a time. Now, in this program, we do offer two specialty tracks if you want to have a focus, either taxation of entities or taxation of individuals. I’ve also had questions, students work with clients from the individual or sort of the business side, are they able to choose courses from both tracks? And yes, absolutely can do that as well.
And in this program, there are a variety of different tax professionals coming into this program. So we have students from public accounting firms, we do work with private industry folks, individuals coming from the IRS and, of course, the big four firms as well like Deloitte, KPMG. So, it is a fantastic opportunity to collaborate on cases, trade ideas, learn from each other and develop strong networking opportunities as well.
Angela LaGamba: Great, thank you very much Michelle for telling us more about the online Master of Science and Taxation. And now I’m going to hand it over to Professor Gagnon to walk us through generation skipping tax.
Timothy Gagnon: Generation skipping is that tax that nobody wants to talk about because it keeps coming and going, but before we go that deep on it, let me give sort of a background there. I’ve been at Northeastern eight years full-time after about 15 years on the edge on faculty. So, I’ve been around a long time, which I guess makes me old a gray, but it is an interesting program to work from. And it can be very enlightening because we get a lot of students and a lot of people and a lot of experience so that you get a lot of camaraderie between the students. So, you can also make some very good contacts when you have questions going forward which is always sort of helpful from my standpoint because some of these questions always get very difficult and it’s probably somebody that you can sort of ask the quick question. That being said, let’s deal with generation skip.
Generation skipping really came about because Congress really thought there was too much money moving between multiple generations that weren’t getting taxed. They thought they were missing out on estate tax. The two bigger trusts that made that come about if you think out there, the Rockefeller and the Kennedy Trust where the grandparents put it in trusts where basically it benefits the grandchildren and greatgrandchildren going forward. And since they moved it away from going to their kids first, Congress did really miss one because if the grandparents had given it to the kids, then the kids would have given it to the grandchildren, there would have been two estate taxes hit. And by putting it in a trust and skipping the children, jumping down to the grandchildren, they got the opportunity to move it and save an estate tax. It doesn’t seem like much except when you look back at the time you’re talking about a 50, 60 or 70% tax at best. So, if you’re looking at a $10 million trust, you’re looking at a potential between $5 and $7 million getting missed.
So Congress said this won’t work. We’re not going to allow this money to slip away from us, as they would put it. So, they said okay, let’s come up with a system that taxes that jump that basically gives us the tax today that we think we would have collected when the kid dies. That’s really what we’re looking for. What would we have gotten, so we’re going to get that tax early. We’re going to get it – if we’re looking at time, value and money, we’re getting it well before we would have ever collected should the kids die. And they can use some that there’s some money left when the kids die.
So if I bring the kids into the trust and then move down, we’re hoping that the kids don’t use it all up because I’ve now paid tax to go to that grandchildren’s generation. But, maybe the money won’t be there, who knows? Bad investment, poor investment, always a challenge. So, you’re pre-paying in today’s dollar the tax that might come up in 20-30 years. So, it does create a lot of questions in our mind of what’s the proper number, should we do it, should we jump, should we not jump when we pay the tax? Should we pay it immediately on direct? Do we wait for a termination or do we have pre-distribution and up go further into that?
So, it’s always a perception. And then, of course, you have an exemption. But the exemption is separate from the Gibson Estate Tax exemption. So, it gets used differently. So, you’ve always got to keep that in mind and you’ve got to track it separately, which is always the fun. So, we were going along in ’76 they tried to pass one, a GST tax, it didn’t work. They kept extending it extending its application. They finally said it just doesn’t work.
So in ’86 they restructured it, broadened the reach, increased the exemption, created a flat rate. It’s just a maximum federal estate tax rate, the GST rate. No going up to the charge, no going to marginal. It’s top rate. So, think about that if you receive what today is $5.4 million of GST, it’s going to be all at top rate, every dollar. But think about it, when you make a gift to GST, you’re using up the unified credits and the GST credit. So, you might save on the GST, but you might have used up your unified credit already. So, you got to pay the gift tax, but saving on the GST could go the other way. If you end up using both, you’re giving $6 million. Now you’re at top rate for both the gift tax and a generation skipping.
So, now you’re talking close to an 80% tax, which is what knowing about it and knowing how to plan around it becomes very valuable, because I don’t know about you but an 80% tax for every dollar I give is quite steep from the other hand if I do it during life, I got a dollar out, I got another 80 cents out because I paid the tax, I got $1.80 out of my estate. I’m not sure if my heirs are going to be appreciative that we took my estate down by $1.80 when they really wanted the money.
So we had it coming in. It stayed pretty consistent. So, the whole question comes down. It says that they’re skipping transfer tax, generation skipping. When does a skip occur? How do I know when a skip occurs? How will I look at a skip? What is a skip? Any ideas from your standpoint? When do you think a skip would occur? I’ll take any replies you like. It’s a quiz.
Angela LaGamba: Oh no, I was going to say to our audience, you’re more than welcome to send your questions through the question and answer box for Professor Gagnon. Go ahead professor.
Timothy Gagnon: A skip is when a transferor conveys property to the benefit of any individual more than one generation removed from the transferor. Greatest legal deal you’ll ever run into walking around in circles. Basically it means when you made the transfer, there was a generation below you that was still alive and you skipped them. If the generation below you are not alive, I have no skip because there isn’t an estate tax that the IRS would have gotten their hands on.
Think about that from the standpoint of if the grandparent is alive, the parent is dead and he gives money to the grandchildren. The IRS didn’t miss a tax because there was no child for it to go to be taxed. So, that’s not a skip. If the parents are alive, it’s a skip because it was that intermediate generation that they could have got an estate tax on if it was still there when they died. So, we have to always look at that. There’s a whole arrangement to how to count, when to know where you are. But is the generation in between alive? If they’re not alive, how can you skip them? And there’s where a lot of times we get hung up because they will list the grandchildren so they must be skipped. Are the parents alive? No. Because then there’s no skip because that’s a direct movement. As we like to say as you move up a generation, so there’s no skip.
So let’s look at that. It comes to section 2601. It’s a supplement to the estate tax and it provides that any taxable gift will be increased by the amount of any GST tax on the transfer for a direct skip. What does that mean? Think of it this way. One the only thing that a GST tax applies to is a taxable gift. We all know that there’s an annual exclusion out there of $14,000 that is not taxable, not subject to gift tax. Therefore, it’s not subject to GST tax either because GST says you have to be a taxable gift subject to the gift tax system, or the estate tax system to be subject to GST.
So first thing you got to figure out is this skip subject to your estate tax. If it is, then I got to look and say okay any taxable gift is increased by the amount of GST tax. So the pain of the GST is an additional transfer to two generations below and subject to GST tax. Doesn’t that get confusing after a while?
So I said okay, I got to figure out skip. So, I got to look at the three, there are three types of skips. There’s a direct skip, there’s a taxable termination and there’s a taxable distribution. Probably the easiest one is the direct skip. But I got to figure out first who’s the transferor and that’s the person who is most recently subject to a stated year tax with respect to the property. Think of that real closely. The transferor is whoever it would be includable in their estate currently that moves it. If it’s a taxable transfer under your will, it’s the decedent. If it’s a gift, it’s the donor. If it’s a general power of appointment person, it’s the power holder that could exercise or lapse the power.
That’s a very tricky area when you get into it because a power holder, general power, is not a special, but a general power means I have the ability to appoint your assets to my creditors, to myself, to my estate or my estate’s creditors. Therefore, if I had that power and I didn’t exercise it and two generations below are going to benefit from my ability to exercise, I, as the power holder, have just gone a generation skipping transfer and am subject to tax. Think about that, I could be subject to a GST tax using my exemption on assets that I never really took control of because I let the general power lapse. I didn’t exercise it. The general power can create a GST event, even though you don’t have the assets, which is kind of scary from our standpoint.
So once I figured out if there’s a skip, I figured out if there’s a generation below, I figured out whether I really have moved and cheated the IRS out of one more look out of the value of the asset moving down. Because 2613 says a skipped person is anyone who is two or more generations below. The generation of the grant, either by blood or by age. And that becomes an interesting issue. Blood is easier to figure out, but if we don’t have a blood relationship, we start looking at age. We start saying okay how much younger are they? And when I’m 10 generations, I go to the grandparents and count my way down.
If they’re assigned to more than one generation, or even not related, adopted person, considered full family, but you can’t move up a generation to adoption. That becomes an interesting argument. The spouse is the same generations of transfer. Think about that. If I have an 80-year old woman who marries a 22-year old guy, he just joined her generation. So, if he had kids, they just moved up to be the 80-year old woman – they just became at her kids level, even though they’re probably about 70 years younger than her.
So I started looking around. I say okay, who’s in what generation? I have to basically create a chart and say okay pick the generation you’re in. Because with that, I’m going to get to see whether I have a skip that’s taxable or not. So, I’m going to find out where they’re going to be and that becomes very critical to me. If an estate trust partnership or corporation’s the beneficiary, the assignments based on who owns the beneficial interest. So, now they’ve got to go through the entity looking at the beneficial owners and looking what generation they’re in. This is why when you got something on a trust or a partnership or something, I got to look who the beneficial owners are and say what generation would they be? Are they more than 12 ½ years? Are they more than 37 ½ years? How much younger are they than my donor? They’re my decedent. So, I’m looking my way very closely through there. I’m trying to find out, okay where am I? How am I?
I then move from there and say okay is this a direct skip? Because the direct skip is going to be subject to GST tax immediately. The second I move the money, I have to pay the tax by applying my exemption to it and use it up. The directed is out by transfer device or request. Or it’s a transfer to a trust that the only beneficiaries of are skipped individuals. And I say that because if I create a trust for my grandchildren and my children have no rights in that trust, then I have a direct skip immediately because only skipped people are beneficiaries of it. So, I immediately have a tax due. As opposed to if I had transferred to a trust and gave my kids a life interest in the income, I don’t have a direct skip at that point because there’s somebody who’s not a skip person who has a right to the trust.
When my kids die is going to get subject to GST because it’s going to get either on a taxable termination or taxable distribution if we turn it out during the lifetime. So, I got to look at the underlying trust and say okay who are the beneficiaries? Are they all skip people? Are they direct skip? I owe the tax immediately. Is there somebody in there that’s not a skip person, then I don’t have to pay my GST tax yet. I’ll pay it later when the skip people go away because until then there’s somebody who’s a non-skip who’s getting the benefit, then I don’t yet – we don’t know how much has gone to skip people.
If you think about it, if I have a non-skip person in there and I’m paying to them and they live for 40 years, how much and what will the trust be worth when there’s no longer a non-skip person? That’s when I know the value is to GST purposes. Because at that point I know how much is moving to the generation two below.
Now, you can’t move up in a trust. Remember I said previously that if the grandparents are alive, the kids were dead and that meant the grandchildren moved up so there was no skip. If the parents died after the trust was created, the grandchildren don’t move up in the trust, they’re still skipped. So, when we make the determination skip or non-skip, we make it the instant the trust is created, and then we know who the skip people are with the non-skip. When the non-skip is gone, we now have a GST event. Is that making sense or am I totally confusing everyone? Just give me a yay, nay or whoa.
Well nobody screamed. I mentioned taxable termination. Once the person was a non-skip is no longer in the entity and I use trust but any trust type arrangement. Once that person goes away, the whole trust, whatever the value is at that point, is now subject to GST because now I have only skip people. So that means at that point that that non-skip person goes away, I have to now pay the GST tax. And the trust pays. The trust is liable for because that is the one sitting with the money.
Because the trust is sitting with the money, it pays the bill. So if you think about it, skip people are going to get less inheritance, less beneficial interest because the trust’s paying the bill. Okay, not a problem, I can get by that one. No problem going along. But the value involved in the termination is less the expenses, but it’s the value at the time of the non-skip person’s death. Think about that. I had a trust that was growing over time. I’ve got a bigger number being subject to GST tax on the desk. If I have a trust that runs for 20 years while the child’s alive, this gives them income and their principal grows or doubles, I now have a potential that my GST is going to be applied to a trust twice as large, doubling the GST tax.
Now I’ll mention towards the end though sometimes how we try to get around that is called the inclusion for using your exemption against it when you put it in so you can take it out of the GST system. But if I don’t, I’ve got a large GST tax just building up through the years and that could get very, very expensive. Because when you get to a GST that’s in 40-50% at a rate that would mean almost half the trust now gets paid out to the government, so really that growth didn’t do us a lot of good. Which is why I just mentioned in passing the inclusion ratio and the whole idea of applying your GST to the trust at the time you create it to try to take it out of the GST system because then the growth doesn’t matter.
And you’re probably all familiar with that when you make a gift to a trust such as this; you have to file the 709, the gift tax returns. And in there, there is a GST section and that’s where you can apply your GST credit towards the amount you put in to take it out of the system. But again, that’s something you have to do at the time the trust is created. You can’t do it later or you do it at the time somebody dies so that when you transfer the money, you get the GST exemption against it.
Because if you don’t, we’re just going to have a growing tax liability and really going to get hit badly along the termination. So, if I didn’t get a direct skip, if I didn’t get a taxable termination, I’ll get taxed on the distributions. Any time that trust distributes to a grandchild, I have a taxable distribution, I have a GST to assign to it.
So in a way we call it a catch all category. If it doesn’t get a direct and it doesn’t get a determination, than any of the money that would just get first was a distribution. If you get it in the first, you’re going to get it in the third. We’re going to get the money, GST, if it gets to a person two generations below. But, here’s the key, paying the GST tax on that distribution is considered a secondary distribution subject to GST tax. Think about this, every time I pay the tax from the trust level, it’s another gift to you that’s subject to GST so I owe more GST tax. I pay that, now it’s another gift, now I know – so you can start getting to that spiral that can just sort of eat you all up.
A lot of times the way we get around this is we talk to the skip person and say we wanna give you $100,000, but we’re going to give you $150,000 and you pay the GST tax so I don’t have a second distribution. I don’t have a second $50,000 distribution, something the GST is like oh another $20,000. I’ll give it to you Ms. Skip. From there, think about this, it’s the value of the property received, less tax related expenses, which is just the expenses necessary to close something down or to get the distribution distributed. So, in many cases, there are not a lot of expenses going out. And since the trust is paying it, it’s considered ahead of the cash so we’ve got this sitting there.
Now I alluded to the inclusion ratio. That’s the ratio when we look at the trust of how much of it was covered by the GST exemption when it was put in and how much it wasn’t covered. So, when I look at that standpoint, I look and I say okay when they put it in and we did the GST, did we $4 million and we allocated $4 million of the GST exemption to it. Therefore, I’ve already covered. So, that trust no longer has any GST tax applied to it. It’s covered. The exemption took care of it. Anything coming out of there, I don’t have to pay GST tax.
But if I put in then I apply five of the exemption, I have five that’s not covered. So, now 50% of the trust is subject to GST tax and 50% of the trust is not subject to GST tax. So, now every time I make a distribution, I have to figure out half the distribution GST tax, I owe tax, half of it’s not, so I keep going’ back and forth.
So here in the profession they talk about one and a zero. One subject to GST tax, zero not subject to it. And you will see in a lot of documents with trusts it says that if I have the situation, you are to create two sub trusts, one with a one per GST and one with a zero per GST so that when I distribute, I know whether they’ve got to pay GST tax or not because if I keep them all combined, now I got to keep doing ratios, now I got to keep running along. And you guys are probably better at ratios than I am, I really don’t like to have to keep recalculating. I really wanna know is it or isn’t it? Because that way, I’ll know good or bad. But that’s the concept we run into.
And I mention moving up. Again, you can move up, but you can’t move up within a trust. Once the trust is created, the move ups are over. We’re done. You cannot move up any more. So that being said, if there are any questions, please come forth with them or hold them towards the end and I’m happy to answer them, but that’s the genesis of GST. Now I will warn you that when you join the program and you take these and we get into GST, there are a lot more little things going to get thrown at you because there are a lot more little quirks. But that’s the overview of the system itself of a generation skipping tax system.
And it’s a secondary ancillary system to the gift tax from the estate tax. It’s separate and distinct with its own rules, its own credit, and its own analysis. So, you have to sort of lay that over your normal gift tax, estate tax system, your normal analysis from a client standpoint. You have to throw that in because you’ve got to say, okay do I have a gift? Do I have a skip? Who’s the skip? Who’s the grantor? Where does it apply? Do they have an exemption? Did we apply the exemption? Did we not apply? Did we file the gift tax return and not apply the exemption thing equal? They use it all up during their life so the kids will spend it all out. But if they don’t, I now suddenly have a GST.
Did I use my GST exemption and the kids spend it all? So is it wasted it? So these are all those balancing requirements, but the challenges, trying to figure out to use it or not to use it 40 years before it comes up because they put it in trust and the kids live for 40 years, I don’t know. Hardest part on GST is how good’s your crystal ball? Is it cloudy, is it not cloudy? Because you’re trying to guess whether you’re going to need it or not from a long-term.
I’ll leave it at that because I’ll give it back to Michelle to talk about admission requirements, but I’m happy to take questions towards the end if there’s anything I can clarify.
Michelle Yan: Now in regards to the admission requirements, we do require an undergraduate degree from an accredited institution. Typically, we’re looking for about a 3.25 GPA or higher on a 4.0 scale. We do look for an undergraduate or a graduate course in taxation with a grade of 3.0 or higher on a 4.0 scale. And typically, we’re also looking for individuals coming in with a minimum of two years of tax experience, including one busy season or hold the following credentials: a JD, CPA, TFT or enrolled agent.
When we’re looking at application requirements, these are some of the different documents that we look for admissions. The first thing we look at is a current resume. We do look for a current resume, up to date resume. We do look for a minimum of two letters of professional recommendation. We’re looking for an application essay or what we call a statement of purpose. There is a non-refundable $100 application fee. We also do look for transcripts. So, this includes any type of undergraduate or graduate work. Any transfer classes, so we do require again all official transcripts.
And for students who are coming into the program who have a bachelor’s degree from an in international school, outside of the U.S., we will also ask for credential evaluation. If you have any questions regarding that, you’re more than welcome to reach out to myself and we can certainly speak more regarding credential evaluations. And then finally candidates who don’t have an undergraduate in the U.S. as well may be subject to a TOFEL.
Now, when it comes to tuition and scholarship, there is an application fee like I mentioned before of $100. The course tuition is $1,476 per credit hour. There are a total of 30 credit hours and the tuition, you’re looking at 44,280. Now any additional type of books or course material, I would probably allocate another I would say $150-$200 per course and again that’s times 10 courses.
Now, Northeastern University you do have a couple of funding options and scholarships that we do offer. So, Northeastern is committed to supporting our veterans and the online program has recently become part of the yellow ribbon program. If you do fall under this program, than it means most, if not all of your tuition will be covered by the government and Northeastern University. So, for more information please visit the website listed on this slide.
And as part of our commitment to our alums, beginning fall of last year, 2015, the D’Amore-McKim School of Business will now also offer something called the Double Husky Scholarship to all Northeastern alums who have completed a degree at one of our colleges. So, this does offer a 25% discount on tuition. In addition, the $100 application fee will be waived as well. And again, for more information please visit our website listed on this slide.
And finally, Northeastern University also offers something called lifetime learning membership. And it is available to families of currently enrolled full-time students. And these family members are able to take advantage of the 25% discount on tuition. And again if you have any additional questions, that site listed below you can get more information from that website as well.
Angela LaGamba: Great, thank you very much professor for walking us through generation skipping tax and Michelle for walking us through the admissions requirements and tuition fees. We now officially open our Q&A session to our audience. Thank you for sending in the questions throughout the presentation. You can continue to send in those questions using the Q&A box and we will be addressing those now. Professor, we’re going to start with you. The first question that we have is in regards to the generation skipping tax presentation that you gave and the question is does GST apply to irrevocable trust?
Timothy Gagnon: Until the trust is irrevocable, either you died or you made it irrevocable at the time, that’s when the GST tends to apply. If I’m in a revocable trust and the grantor is still alive, you haven’t made a transfer because the grantor can still take the money back or spend it all. The second the grantor can no longer take the money back, usually they died, or you created an irrevocable trust that the transfer can’t the money back, that’s when the GST is going to apply. Because until I don’t have the ability as the creator to spend the money that hasn’t been gifted. There’s a saying, the dominion and control hasn’t changed over. Once that occurs, now my GST comes up.
So yes, it does apply to irrevocable, but it also applies to revocables when the grantor is no longer able to revoke or change the trust, which is usually – guess, unfortunately. Hopefully that answers it.
Angela LaGamba: And to our audience, if you have a follow up questions, feel free to send it in and we’ll ask professor Gagnon. Professor, the next question we have for you is can a U.S. citizen use their $5.43 million in exemptions for a gift to a non-U.S., for example a British spouse or GST to a British grandchild. Go ahead professor.
Timothy Gagnon: Boy, now you’ve got into the tricky because yes I can because we use a worldwide concept in that if you’re a U.S. citizen, you’re making gifts, they’re subject to the gift tax of the GST. If you’re asking me because a non-U.S. citizen spouse have the same exemptions? No. There’s no marital with that and no they don’t. This is where we really get somewhat because you have to deal with a U.S. resident and a U.S. citizen as opposed to a non-U.S. resident even though they’re here.
But yes, I can use my exemption for giving money to others. I don’t have a marital on a non-U.S. citizen spouse. So, therefore I really am using a gift tax and there is the ability to do $60,000 a year to my spouse and sort of quasi-marital deduction. But yes, I am going to use that and if I give to the kids or to a spouse, I am making it because it’s a transfer out of the U.S. citizen’s estate and that’s where we measure the gift and the reduction of the estate. So, that’s where it gets its measures, so yes, you were subject to it and you can use it to go to a non-resident or a non-U.S. citizen. Does that answer the question Joseph or do we need to expand more?
Angela LaGamba: Great. So, Joseph if you have a follow up, feel free to send that through the Q&A and we’ll let the professor know. While we’re waiting for the follow up, the next question that we have is for you Michelle. One of our audience members wanted to know if one were able to do the course full-time online, how long would it take to finish the online Master of Science and Taxation?
Michelle Yan: So, the online MS Tax program is actually considered a part-time program. So, part-time online program, so it’s not full-time. So, essentially, it is designed for working tax professionals who do work full-time and wanna do this program online on a part-time basis. So, the quickest time that you can complete this online MS tax program, it’s about 16 months.
So there are 10 courses, they’re taken one course at a time and each course is about five weeks. So, you’re kind of doing five weeks on. Typically you have about a one-week break in between the courses, then five weeks on again, one week break, five weeks on. So, if you were to do back to back courses, again the quickest time you can complete is about 16-months.
Timothy Gagnon: Somewhere that’s going to be what courses you’re looking to take based on offerings. Because some of them come in a series and you have to have some of the basic before you can take it, so you have to sort of coordinate that. So, depending on what courses you want to take as part of your program that will slightly vary how long it takes to get through.
Michelle Yan: Most of the initial core courses, they may be offered multiple times per year. But sometimes the elective courses are only offered once or twice. So, when you do enroll into the program, we also do recommend that you speak with our student service advisors so they can help you put together your customized schedule. You’ll have a better idea at that point in terms of how long it’ll take you to complete.
Angela LaGamba: What is the likelihood that the GST would affect the middle class income tax payers?
Timothy Gagnon: Probably fairly low because you got to have $5.4 million to give away two generations below before you go over it. And if you’re a married couple it’s 10.8. So, most of the middle class, middle size estates will not have that problem. But at the same time I say that, right now it’s a $5.4 million exemption. Congress can change that number at any time. If you look at some of the proposals out in the political environment right now, there’s talk about maybe kicking the 5.4 back to 1.5, back to 3, dealing with portability, GST is in affordability, even though it won’t affect the middle class as we know it today, it’s something you have to keep track of with the clients because we don’t really know in the end, until they die, and we don’t know what the number will be when they die. So, that’s sort of opting out all the way around. But for the most part, the most middle class client, a little bit of planning, and they can afford the estate tax and the GST tax.
Angela LaGamba: Adrian just sent a note saying thank you for the response. Our next question is for Michelle and the question is what does the tuition cost include? Does it include research material like CCH or CNA?
Michelle Yan: The tuition typically is for the course. So, basically it’s taking the course. Anything on top of that would be textbooks, course material. And I mentioned that additional costs beyond the tuition. So, beyond the fee credit, $1,476 per credit hour, you’re looking at books and course material and that would probably allocate another maybe $150-$200. Now research material like CCH or BNA, I believe that the courses will allow you to have access to these research materials if I’m correct, is that right professor?
Timothy Gagnon: We have RIA available through the NEU library online for all students all the time that they’re in the program. So, we have RIA available. Research into America for all tax research.
Michelle Yan: Okay, and then the access is included in the tuition.
Timothy Gagnon: Right. As long as you have an NEU number, you can access the RIA through the library.
Angela LaGamba: Great, thank you both very much. The next question is a follow up for you Michelle from Joseph as well and the question is courses offered to be a YouTube or webinar. Is Blackboard used? Go ahead Michelle.
Michelle Yan: Yes. So, the way we run our online MS and Taxation program, that’s exactly where we use Blackboard. It’s Blackboard to be able to access all of the course material, course information. That’s where you post your discussions, submit assignments, do exams. So, everything is run through Blackboard, correct.
Angela LaGamba: Thank you very much Michelle. The next question that we have is for you Professor. One of our audience members wants to know do you provide study for Canadian taxation in the master’s program? Go ahead Professor.
Timothy Gagnon: We don’t do Canadian taxation directly. We have two international tax courses, but they’re from the U.S. tax standpoint. I don’t really have any adjuncts who are Canadian tax experts. So, we do international from the standpoint of a U.S. IRS code and how it deal with international transactions. So, Canadian tax directly? No.
Angela LaGamba: Great, thank you Professor. The next question is for you Michelle. The question is does a prospective student need to have an accounting background? Go ahead Michelle.
Michelle Yan: Typically, I mean in terms of our minimum requirements, we want students coming in to have a tax background. So, that’s why we are asking that they’re just coming in with a minimum of two-years of professional tax experience. Now, we do have a lot of individuals who do come in with the bachelors of accounting and that will give students a good base in terms of coming in to the accounting world and moving into more focused tax programs. I have students coming into the program that may not necessarily have accounting bachelors and they may come from bachelors from liberal arts or something a little bit, you know, not very accountant focused. But as long as you have that – you understand a brief understanding of the tax code and worked within tax before, that’s what we’re more interested in. And perhaps Professor if you have any other highlights regarding that question as well.
Timothy Gagnon: I think you have to have a rudimentary knowledge somewhat of what a balance sheet is and how they’re created and what an income statement is because we’re not going to go deep needed. Do you need to have four years of accounting? No, but you should have an idea of where those documents come from, what they represent and sort of how to put them together because if you do in a corporate or partnership return, you have to include a balance sheet with the return. So you have to have an idea of how it’s produced and what it means. You don’t have to go deep, but you have to be able to deal through those.
So, I would think it would be helpful if you had a basic accounting course or at least gotten some knowledge and you can get that during practice, just sort of I would say the two years, that you certainly understand what the relationship between the accounting books and the tax books are. But also exactly what it represents from that standpoint. I hope that helped.
Angela LaGamba: Great, thank you very much Professor. Michelle, the next question is for you. One of our audience members wanted to know will each course have a pre-recorded lecture on video and/or audio?
Michelle Yan: Typically the course material itself, there’s quite a bit of slides, for text reading. Sometimes there will be short videos that each of the professors have recorded. But they’re relatively short. So, couple of minutes, 5-10 minutes. So, there’s no sort of long recorded webinars or lectures as we are sort of going through right now. Now, every week, however, there are two optional live sessions with your professors and with the instructors. And during these times, they’re usually held in the evenings for about an hour. And it’s a very interactive session. Where the professor, they have a headset. I can utilize a webcam. And so, you are able to communicate with your professors and fellow classmates as well, ask them direct questions.
So, it can be a very interactive session as well. So, if you are able to attend these live sessions, and I definitely recommend students to do so. However if you cannot make them due to whether it be family or work obligations, these live sessions will also be recorded and you can view these recordings at a later time. And so, again, they’re two hours every week, one hour each. So, two evening live sessions.
Angela LaGamba: Thank you Michelle. The next question that we have is for you Professor in regards to the generation skipping tax. Adrian wanted to know even though the GST is in the Internal Revenue Code, are they highly audited for compliance or pretty much rely on ethical application by tax professionals for taxpayers? Go ahead Professor.
Timothy Gagnon: Are they heavily audited? No, because there are so many exemptions out of it. But every 706, estate tax return, is manually looked at and that’s where a lot of the GST comes up and there’s a form within it, dealing with GST. And there are gift tax return – if you have GST, you note it on it and that usually triggers it to be looked at. But when you say heavily audited, every estate return is looked at by human because there’s no machine to do it. Do they go deep into it? No. Typically, they get looked at by a couple of paralegals in Kentucky who handle a lot of the first passes.
If it’s a more complicated return, it will get sent to the tax council in the region who tends to be an attorney who has more knowledge and can dig deeper into them. But again, because most of them we can keep applying the exemption, until you’ve really gone through the exemption, they don’t get a lot of attention because finding another $10 of gift with an exemption still out there doesn’t create any tax. And as you’re probably aware, they get measured a lot, or at least a lot of their purpose is to find additional tax to collect. So, if I have a lot of exemption out there, it doesn’t get a lot of attention because finding it isn’t going to get us any more money. Now hopefully nobody’s working for the IRS who’s now going to start looking heavily at this and get me in trouble.
Angela LaGamba: Great thanks Professor. I wanted to see Professor if you had any final thoughts before we wrap up today’s webinar.
Timothy Gagnon: From my standpoint, doing the online is very dependent on the student because it does require you to be very proactive, which some of you don’t understand. For the most part, most of the lead and the instructors are very willing to take emails and even arrange phone calls if there’s areas that you’re not understanding that we need more clarification for or come up with more materials that help you going along. I mean our goal is to get you through as much knowledge as possible, but you have to be the proactive telling us what you’re not getting or where you need more help because we can’t really tell that. And because it’s a five-week program, it moves fairly quickly.
So, you really have to stay up on things and you really have to sort of inquiry where you need more explanation. I know with myself, my chat every week starts with a script of things that I want to highlight, but I really appreciate if people take me off-script, give me their question, to give me their comments to see if we can’t clarify, because I’m not sure what they need clarification on. They’ve got to tell me, but I will try to highlight the things that I think are important. I’m also very willing to take emails during the week to clarify or find other ways to try to make sure you learn it. So, it can be a very proactive system. It doesn’t have to be totally static, just looking at the videos and doing the reading. It’s as interactive as you want to be using the lead and the instructors to help you get the information down pat. And from my standpoint it’s fun, but remember I’m a tax professor, so when I think its fun, it’s a little strange.
Angela LaGamba: Thank you Professor. I’m also going to hand it over to Michelle for final thoughts.
Michelle Yan: Yes, so I just wanted to direct everyone’s attention to the screen. So, there’s my contact information, email, phone number. If any of you have any additional questions or would like to know more regarding the application process, feel free, don’t hesitate to contact me. There are a couple of important dates on the board as well, so our very next start date coming up begins actually on June 13. So, that’s our last summer start for summer. And then our fall one begins on September 5th. So, these are the next two start dates coming up. Again, if you have any questions, concerns, application questions as well, don’t hesitate. My contact information is on the slide.
Angela LaGamba: Great, thank you very much Michelle and Professor, thank you once again to both of you for taking the last hour to walk us through the program and also generation skipping tax. If you do have any follow up questions, we’ve put Michelle’s contact information on the slide. You can also schedule an appointment or by phone. That is all the time we have for today and have a wonderful day everyone.
[End of Audio]
This video features Robert Picariello, financial aid advisor for all of the graduate programs at the D’Amore-McKim School of Business, discussing the basics of graduate financial aid, the types of financial aid available, the monthly payment plan offered by Northeastern, and tuition reimbursement that may be available through your employer.
Angela LaGamba: Welcome to Northeastern University’s financial aid webinar for online business programs. My name is Angela and I’ll be your moderator for today. Your webinar presenter is Robert Picariello. He’s the financial aid counselor for the D’Amore-McKim School of Business Graduate Programs at Northeastern University. I’m now going to hand it over to Robert to tell us more about financial aid. Go ahead, Robert.
Robert Picariello: Thanks, Angela. Like Angela said my name is Robert Picariello. I’m the financial aid advisor for all of the graduate programs here at the D’Amore-McKim School of Business at Northeastern University and today during the webinar we’re going to go over a handful of topics including basics of graduate financial aid, the types of financial aid that is available, the monthly payment plan that the university offers, tuition reimbursement that you may have available through your employer, and we’re going to finish off with the student financial services department contact information.
So starting with basics of graduate financial aid I do like to go through some of the basic steps because sometimes students aren’t familiar with the federal financial aid process. The first thing that you need to do is file what’s called a FAFSA and the website is here, it’s very easy, www.fafsa.gov. It would also be the first thing that you could Google if you were to Google FAFSA. That stands for the Free Application for Federal Student Aid and on that application you do need to list Northeastern University’s school code, which we have listed here as 002199. You can also search for us by city and state, so you would be using our main office, which is in Boston, Massachusetts and just looking for Northeastern University. But the quickest way to find us would be by our school code listed here.
All graduate students are considered independent and one of the important factors here is that students who may have had to fill out financial aid at the undergraduate level, they’re considered dependent students, but once you become a graduate student regardless of what your age is, you are considered an independent student and again, that doesn’t matter if you’re a younger graduate student or you’re coming back to school after a period of time in the workforce. You’re always considered an independent student when you’re in a graduate program. What this means is that you’re not required to provide any parental income information or signatures. The only information that we need is you as the student and you have the option to put your spouse’s information on there if you qualify in that scenario.
There are no federal grants available to graduate students. The majority, if not all, financial aid availability for graduate students do come in loan programs, which we’ll talk about in a few minutes. And there are a couple of rules of thumb for federal financial aid for graduate students that we’re going to go over.
Students must always be enrolled in at least six credits in a given term to be eligible for federal financial aid. In the online business programs here at the D’Amore-McKim School of Business, each full semester is broken up into three smaller modules. So you’ll have, for example, in the Fall you’ll have Fall 1, Fall 2, and Fall 3. Over the course of those three modules that consist of the full fall semester, you must enroll in at least that six credit minimum throughout the course of that entire semester. So a lot of students sometimes will take classes in all three sessions, but for the most part you would have to get to at least six credits in either two of the three sessions or across all three depending on which classes you’re taking.
And then one of the important factors I like to list at the end is all communication regarding billing and financial aid is completed through your Northeastern email address, which you will be provided with once you enter the program. And this is important because sometimes students are managing multiple email addresses at the same time, whether it’s personal or for work, but we are – obviously you’re going to be a graduate student here at Northeastern, so we do all of the communication through that email. It is very easy to forward this email to something you regularly use if you need to.
So we’re going to talk about the types of aid that is available for graduate students first. The main source of financial aid through the FAFSA program is the federal unsubsidized Stafford loan. This loan is – the maximum is $20,500 per academic year, and most graduate students in the online business programs here will qualify for that amount. This loan comes with a fixed interest rate and the loan origination fee that is taken off the top of the loan by the Department of Education. So what this means is that the Department of Ed does charge a small fee to use their loans. So while the gross amount that you receive might be $20,500, the net amount does come in a little lower than that. This loan does accrue interest while you’re in school, however, there is no credit check required to apply. The only requirements for this loan are you need to be a US citizen or permanent resident, and you need to be enrolled in that six credit minimum like we talked about on the last line.
In addition to this loan, there’s another federal student loan program that graduate students can access and that’s the federal graduate PLUS loan program. This loan can be used to borrow up to you total cost of attendance less your other aid. What that means is if your $20,500 loan does not cover everything that you are looking to have covered, and that was the maximum that you received through the FAFSA, you can apply for this graduate PLUS loan which can help with the costs that go above and beyond that over the course of the academic year. This also has a fixed interest rate and a loan origination fee that is taken off the top by the Department of Ed, similar to the Stafford loan. Interest accrues while you’re in school.
However, there is a credit check required for this loan. This is not the same as applying for a mortgage or applying for a car loan, but the Department of Education is running a credit check to make sure that the student may not have previous federal loans that are in a delinquent status or something of that effect and just making sure that you do not have any larger credit issues. I mean if it’s something where you’re a little unsure about your credit score or something like that, I would still encourage you to apply for the graduate PLUS loan if it’s something that you’re planning on using to finance your education.
This does require a separate application which is available through the MYNEU student portal. We offer the PDF on our financial aid website as well, and the easiest way to get this done, though, is through MYNEU student portal, it’s a link and it’s done completely electronically and it’s only two pages and very easy to complete.
The current federal interest rates and fees can be found at studentaid.ed.gov. These are rates and fees that adjust once per year. The interest rate is fixed from July 1st through the following June 30th, and the loan origination fee is fixed from October 1st through September 30th the following year. So, those occurring fees can be found on the studentaid.ed.gov website right there.
In addition to federal loans, there are also private student loan lenders that do offer student loans to graduate students as well. There are multiple lenders who all have different terms and fees and these can vary depending on the lender that you decide to use. These terms and fees are becoming more and more comparable with the federal rates, so I would definitely urge you to take a look at the financing options that we provide on the Northeastern website with the link available here. So, on the Northeastern website if you were to just go to our financing screen, we do have a list of commonly used lenders that students at Northeastern will generally use. And a lot of these may line up with some accounts that you may have in other aspects of your life like a car loan or a mortgage or a credit card. So if you already have a relationship with a private lender and this is the route you are looking to go, this might make sense to take a look at prior to figuring out what type of loan you’re going to use to finance your education.
We do also offer the Double Husky Scholarship. The Double Husky Scholarship is a 25 percent tuition discount for students who have a degree from Northeastern already. So if you are a Northeastern alum and you’re looking to come back and do your graduate work at Northeastern as well, and you’re looking at the online business school programs, whether it’s the MBA, the MS in Taxation, or the MS in Finance, you do have the ability to access this Double Husky Scholarship which will allow you to get a 25 percent tuition discount. More information can be found on the Double Husky website of Northeastern, but the gist is if – the thing to remember is the 25 percent discount off of tuition only.
We also offer the monthly payment plan. So the monthly payment plan is something that is administered by a third party called Higher One. The company Higher One administers monthly payment plans for multiple universities as a third party vendor, and this plan is completely separate from using a student loan program. So this isn’t a loan, this is a way for you to break up the payments for the semester over the course of a period of time.
Enrollment in the monthly payment plan can be set up via a checking or savings account. Unfortunately, Higher One does not accept credit cards as a form of payment for the monthly payment plan. These plans come interest free. However, a $35 fee is charged per semester upon enrollment. And some information and deadlines can be found on the Higher One tuition pay website.
One of the things to keep in mind is that this is not a long-term payment plan, so these payment plans offer assistance to break up the costs of an individual semester. So, for example, if you were looking to break up the fall payments, you would have the ability to break up your fall payments over the course of a fall semester which generally runs from September through December. So it is a way to break up a few payments, especially if you’re only going to be taking one class at a time. It could be an avenue that students may want to take a look at or use in conjunction with another form of payment.
Lastly, for forms of payment and financing, I’d like to mention tuition reimbursement because this can be a big perk depending on your employer’s rules and regulations and what they offer. So there are a couple of different ways that we generally see tuition reimbursement used by a student. The student if they’re getting paid – if the employer is going to be paying Northeastern directly, which is the more rare case, the student must provide Student Financial Services with a written statement of intent to pay by their employer no later than the end of the first week of classes. This is a standard sheet that we can provide to your employer where they fill it out promising to pay regardless of the grade or anything else that the student may have to reach. In the next bullet it does say if there are stipulations associated with the payment agreement, such as a minimum grade requirement, then the student must pay the university first and then they would be using their reimbursement funds to do exactly that, to reimburse themselves.
The other way, the more common, is the tuition reimbursement that’s paid directly to the student. So the student would still be responsible for paying their bill prior to the billing due date. Tuition unfortunately cannot be left unpaid pending a reimbursement at the end of the semester. A lot of the times employers will require the student provide a grade and a certain grade would then trigger the reimbursement and at that point at the end of the semester the student’s bill would definitely have been due at that point. So, again, can’t leave the bill unpaid towards the end of the semester.
But we do have a plan for students who have 100 percent tuition reimbursement with or without a grade requirement and I would recommend reaching out to me for further instructions on that because the students with 100 percent tuition reimbursement we do understand they’re kind of stuck depending on whether it’s a grade or not. We want to make sure they can access that funding source and we do try to help them out. So if you happen to be in a situation where your employer will cover the entire cost of your tuition, but they won’t do it until the end of the semester, reach out to me here in the financial aid office and we can take a look at your individual circumstance.
Speaking of reaching out to me, here is the Student Financial Services contact information. Like I mentioned earlier, our main office is located in Boston, Massachusetts. So if you’re not a local student, obviously the main office may not be as helpful, but if you need to send anything to us or fax, mail, anything like that, our main office is found here on the Northeastern website you can also look up all of our hours and things like that, but we’re going to go over that as well.
The graduate financial aid office has its own phone number, so if you’re looking to reach out to me or anybody else in the graduate financial aid office, we’re located at 617-373-5899. And you can also send a general email at any time to our email address here, it’s email@example.com.
If you’re looking for just billing information or have a question about billing and payment and you’re not someone who may be looking at financial aid, but you’re just looking for questions about your bill, we do have a dedicated line for that as well. That is 617-373-2270 and our billing office can be reached at firstname.lastname@example.org.
Our office hours here in Boston are 8:30 a.m. to 5:00 p.m., so we can be reached via phone or in person if you’re local during those hours. Again, my name is Robert Picariello. I’m the financial aid counselor for all of the graduate programs in the D’Amore-McKim School of Business including all of the online programs. My email address is fairly simple. It’s my first initial dot last name so it’s email@example.com. I can also be reached at the phone number 617-373-5899 here in the grad financial aid office. If I happen to not be the one answering the phones at that time, just feel free to talk to one of our staff or they can get you in touch with me directly. And I thank you for your time.
If you have any questions regarding any of the topics that we went over today, I would encourage you to shoot me an email or give me a call. I’m happy to answer anything, even if you’re not a live student at this time, if you’re still in the application process, or if you are still making personal decisions on what’s the school you’re attending or what kind of financing you’re looking for, I’m happy to answer any questions whether you’re a deposited student or not. So feel free to give me a call, and again, thank you for your time and I look forward to hearing from you.
In this webinar, we’ll hear from Professor Rupert as he explains the Online Master of Science in Taxation program at Northeastern University, the Partnerships and Special Allocations course, and how his courses operate.
Angela LaGamba: Welcome to Northeastern University’s online Master of Science in Taxation webinar. My name is Angela and I’ll be your host and moderator for today. Before we begin I’d like to go through some logistics and commonly asked questions for our webinars. We do encourage you to send in your questions during today’s session. We will be addressing them throughout the webinar and also during our dedicated Q&A session. You can just place them into the Q&A box and hit enter. We also are recording today’s session so you can listen to it at a future time.
All right, let’s get started. Your presenters today are Professor Timothy Rupert and Michelle Yan. Timothy Rupert is a Professor of Accounting at Northeastern University’s D’Amore McKim School of Business. He completed his PhD in accounting and MS in taxation. Professor Rupert’s research includes cognitive and decision making processes of tax payers and tax practitioners. We also have Michelle Yan, she’s the team enrollment lead for Northeastern’s online Master of Science in Taxation, and her role is to help perspective students through the application and admissions process.
All right, let’s get started. We have our agenda for today. We’re going to be talking a little bit more about Northeastern and the online Master of Science and Taxation. We also have Professor Rupert who’s going to be covering Partnerships and Special Allocations. And then we’ll be providing more information on admission requirements, tuition and fees, and as I mentioned earlier, feel free to send in your questions as we do have a dedicated Q&A session at the end of this webinar.
All right, without further ado, I’d like to handle it over to Michelle to talk a little bit more about Northeastern University. Go ahead, Michelle.
Michelle Yan: Thanks very much, Angela. Could I get the next slide? Okay, perfect. So our online MS in Taxation program is part of the D’Amore McKim School of Business. It was established in 1922 and has a rich history and reputation for scholarly research and teaching excellence. Building on high academic achievement, wide range in work and consulting experiences, rich diversity, and our extensive corporate ties, the D’Amore McKim School of Business faculty members are leaders in their fields and regularly receive worldwide recognition and awards for their contribution to theory and the practice of management.
We do have over a – a global network of over 200,000 Northeastern alumni spanning more than 15 countries, including China, Canada, India, England, Germany, and Australia to name a few. Almost 90 percent of our students pursuing graduate business degrees have work experience, so our programs are very accommodating and flexible.
Now when it comes to accreditation and rankings, we are accredited by the AACSB International. This is one of the highest business accreditations worldwide. And most recently, Northeastern University online graduate business programs was also ranked number 18 in the US, 2016, by US News and World Report. This also does include the online Master of Science in Taxation as well.
Now a little bit regarding the program itself in terms of sort of some of the highlights and the structure of the program. The online MS in Taxation program was certainly designed with the working tax professional in mind. The course work is 100 percent online. There is no residency requirements, and the program can be completed in as little 16 to 18 months.
Typically there are ten courses and students are only required to take course one course at a time, and each of the courses are five weeks in length. So they are a little more accelerated program, so again, five weeks in length. But I find that most students who are coming into the program, that they really enjoy the schedule as many working tax professionals coming in, they have full-time positions, some of them even have their own practices, family, and they have kids, and taxes, as you know, can be very hectic. So the actual one course at a time actually works very well.
Now in this program we also do offer two specialty tracks if you do want to have a focus. There is a taxation of entities or a taxation of individuals. Students who would like to choose courses from both tracks, and if you’re a business, you work with both individuals as well as business clients. If you’re asking whether or not you can sort of mix and match between the two tracks, actually you can do that as well.
Now there are a variety of different tax professionals who are coming into this program. We do have students coming from a lot of public accounting firms, individuals coming from private industry, the IRS, the big four firms as well, of course. So it is certainly a fantastic opportunity to collaborate on cases, trade ideas perhaps, learn from each other and certainly develop strong networking opportunities as well.
Now most recently we conducted a survey in September 2016, so just about two months back, of Northeastern University online MS in Taxation graduates. These are some of the things that they had to say. And they mention that some of the top reasons that students attend Northeastern are certainly the online format and the accreditation. The online format we work with something called an asynchronous system and essentially there are no specific login times that students have to be online. So it’s simply a lot more convenient, a lot more flexible. Again, for students who do work full-time they have their practices and want to review certain things, course materials at their leisure.
Angela LaGamba: Great, thank you very much, Michelle, for walking us through Northeastern and also the online Master of Science in Taxation. What I’d like to do now is to hand it over to Professor Timothy Rupert who will talk a little bit more about partnerships and special allocations. Go ahead, Professor.
Timothy Rupert: Thanks, Angela, and welcome everyone to the webinar. As Angela mentioned, my name is Tim Rupert. I’m a professor in the program and I teach two of the courses that are part of the five required courses in our online program: the Partners and Partnerships course and the Corporations and Shareholders course. So I thought I’d give you a little bit of an idea of the types of things that we cover in one of those courses, the Partnerships course.
Just to give you a sense of where this falls in the curriculum, typically students will take these two courses, the Partnerships and the Corporations course, as part of their required courses. They usually take at least two courses before this, one on advanced individuals and one on research and practice and procedures, and then they move into these courses. So I wanted to give you a sense of what one of these courses is like and some of the information that we talk about. So today I thought I’d talk a little bit about partnerships and special allocations in thinking about a partnership as an entity choice.
In the two courses that I teach, the first lesson that we look at is comparison of the different entities. I know that a lot of you have a great deal of familiarity with the different possibilities and how they’re all treated, but it’s always good for us to start with that to get a baseline that we’re all working from, and also a little bit of a historical perspective on how we arrived at our current choice of entities .
So just to remind you of some of the key issues that are associated with partnerships, we know that there’s a single level of taxation versus, you know, when we’re dealing with corporations there’s double taxation in our system. So the earnings will be taxed to the corporation and then when it’s distributed to the shareholders, it’s going to be taxed again. So a huge benefit of a partnership or other types of flow through entities that are taxed as partnerships is the fact that we have that single level of taxation. We also know, you probably have this from previous experience to build a business can be a pretty difficult thing in terms of liquidity. So we know about those benefits.
Along with that then comes the fact that there’s a great flexibility in allocating items. If we think about forming a corporation and, let’s say, that you and I are going to become 50/50 shareholders. There is a lot of advantages to forming a corporation but one of the issues associated with it is that if we plan to do distributions, we have to do those on a pro rata basis. So if we’re going to distribute a dividend, I’m going to get 50 percent of it and you’re going to get 50 percent if we’re going to be 50/50 shareholders.
In a partnership we can be 50/50 partners but we have a great deal of flexibility in how we allocate specific items. So we might say that for allocating depreciation I’ll take 70 percent and you’ll take 30 percent of it. There are some rules that control that a little bit. Those allocations have to have substantial economic effect but in reality it gives us a great deal of flexibility.
One of the underlying themes that I have then in my partnerships course is that if we think about that great flexibility that it gives us and the fact that they’re single taxation, and when we’re thinking about formation that it’s nontaxable, it offers some opportunities and there would be opportunities for taxpayers to shift the amount or the character of income. So many of the rules that we look at in our course and the rules that we have that provide our framework on how partnerships will be taxed, are designed to stop us from shifting that amount or character of income. A good example of ____ shifting the amount of income and how that’s a possibility in the partnership setting and how we have some rules that are going to put some restrictions on that.
So this diagram that I have for you is a really simple formation problem. We have two partners. A is willing to transfer cash of $50,000 and they’re going to get a 50 percent interest in return. And B is going to transfer land and has a fair market value of 50, a basis of 30, and they’re going to get the other 50 percent interest. So a real simple partnership, but it will illustrate the examples that we want to show.
So as we’ve already discussed when you from a partnership it’s going to be a nontaxable transaction. So the partners in that example are not going to have to recognize typically any income or gain or loss, and the partnership will not either. So if we look at the partnership and focus on it, they’ll end up taking a carryover basis in that land. So for partner B that land had a basis of $30,000 and that will become the partnership’s basis in that land, right? So it’s a fairly straightforward implication and you’ve probably seen that before. But now let’s think about what happens as we move this partnership forward and what implications this nontaxable formation may have.
So let’s assume that it’s a couple of years later and our partnership decides to sell the land for $50,000, the fair market value it had when in went in. Let’s say that that fair market value didn’t change. Well, any time we sell an asset we know that we have a basic formula in tax that we use to calculate the gain or loss realized. And that’s the amount realized minus the adjusted basis. And you’ve all probably know, given your backgrounds, that’s basically what you sold it for minus what you purchased it for. We know that it’s more complex than that, but conceptually that’s really what we’re doing when we’re calculating the gain or loss realized.
So in this one the partnership sold it for $50,000. On the nontaxable formation their basis in that land was $30,000, so they’re going to have a $20,000 gain. But, as I’m sure you also know, a partnership is not a separate taxable entity. That’s what leads to that single level of taxation. Instead, they flow through all of the income expenses to the individual partners. So in this case we have this $20,000 gain, and we have to figure out how we’re going to allocate that to the two partners that we have, A and B, in our scenario.
So if we didn’t have any special rules, let’s think about how we would allocate it. As you see on this slide, if there aren’t any special rules, A and B are 50/50 partners. So we would split any income gain, losses, expenses typically that same way. So here for that $20,000 of gain, A would get $10,000 and B would also get $10,000. So let’s think about the implications of that and what that means for our partners. Well, if we didn’t have B transferring this property into the partnership, if they had sold it instead, they would have had to recognize all $20,000 of gain on that land because they had a basis of 30, it had a fair market value of 50. So if they didn’t transfer it in, if they just sold it instead, they would have to recognize all $20,000 of that gain.
If we look at the implications without any special rules, and again, I’ll jump back to that so that you see it, what we see is that they’re splitting that gain $10,000 each. So effectively what B’s been able to do with this is if we don’t have special rules, they’ve been able to transfer $10,000 of that gain from them to A.
Now that obviously is great for B and it means that they’re only going to be recognizing half of the gain that they would have, but you can see why they might even have motivation to do that, especially if we start to think about this as maybe A and B are not entirely independent parties. Maybe they’re family members and B is a parent and A is a child that’s in a lower income bracket.
Well, now if we can do that, we’ve basically cut this asset in the family through the partnership, and we’ve transferred gain from what may be taxed at, let’s say, the highest individual rate of 39.6 percent down to a much lower marginal tax rate potentially for a child, maybe they have the 10 or 15 percent bracket. So if we didn’t have special rules there would be a big opportunity here for us to shift income and here we’re talking about the amount of income to someone else.
So what do we do in these cases to stop that from happening? An important set of rules that we have for partnerships are those rules that are contained in section 704C. So it looks like some of you have some familiarity with partnerships, that you work with it occasionally, some frequently. So you may have come across section 704C before. Section 704 is a really important code section when we look at the code structure or framework for partnerships. But this one particularly, section 704C, deals with any building gains or losses that are transferred when we form that partnership.
So in this case what it tells us is that if there’s any building gain or loss, so like in our example with this land being transferred in, there was this $20,000 building gain that we’re going to have to firs allocate that gain to the contributing partner. Then if there’s any other gain after that, other parts of section 704 in A and B will tell us how we’re going to allocate it.
So instead of getting to shift this income from B to A, our results are going to look like this. Under section 704C, the way that we’re actually going to allocate it is A’s not going to get any of that gain, that $20,000 gain when the partnership sells it. And B will end up recognizing all $20,000 of it. So the end effect of this is that B just wasn’t able to shift the gain from them to A. So that’s an important, again, underlying issue with all of our partnership settings. That if we didn’t have some of these special rules there would be opportunities to shift this gain.
So what we’ve done today with this example is just sort of set up that basic issue so that you understand it. If we were actually going through our partnerships course, we would follow that up with more advanced issues about how there might be opportunities to shift that income and what our rules tell us that might stop it, and how we might plan for those cases.
So we looked at a simple example that dealt with gain. And it sounds like just from your backgrounds I kept this example really simple, the amount of gain equals exactly the amount that was built in, but you probably know, given that some of you have some familiarity with partnerships, that if the gain wasn’t exactly equal to the building gain that was transferred in, that we’d have some different issues that are involved.
Those are some of the things that we would be looking at in our Partners and Partnerships course. Obviously we won’t talk about those today, but it includes things like the allocation of depreciation because it’s not just then when we eventually sell the asset, but it will also impact how we treat that asset as we’re holding it. So I used land in our example so we didn’t have to worry about depreciation, but if we’re dealing with a depreciable asset, you can see that, yes, there would be opportunity to shift if we wait until the eventual sale, but we’d also have opportunities to shift just as we hold that asset and continue to depreciate it.
There’s another issue here call ceiling effects, and I’m guessing maybe unless you really work in this area, you may not have seen this as often. But ceiling effects deal with this issue where let’s say we don’t have enough gain or depreciation to allocate to the partners as they deserve. So what we do in those cases is we use these advanced methods, either allocating under the traditional method, the traditional method with ____ of allocations or the remedial method.
So, again, if we were working through this in our course, we’d be talking about how do those methods work, and why might we use one of those instead of others? Who gains, who loses out of it, what are the advantages and disadvantages of it and how do we plan around it? So that gives you an example of the shifting of income.
I want to look at another example to talk about the other possibility that we have when we’re using this non-taxable formation and it’s a single level of taxation. So the issue that we have there is dealing with shifting the character of income as being a possibility. Again, if we didn’t have special allocation rules, there would be opportunities for partners potentially to shift the character and so let’s take a look at a simple example of that.
So, again, I’m using land here because it avoids a lot of issues for us, right, and I saw somebody popped up the question that you can’t depreciate land. That’s why we used it in our first example. So that way we didn’t have to worry about special rules related to depreciation as they held the property because land they wouldn’t be depreciating, so they could sell it for several years later and we wouldn’t have to worry about their basis changing. So that’s why we used that simplified example. But in our course we would actually be looking at other types of assets to see how depreciation would work when it is an asset that would be depreciated.
Again, let’s use a simplified example here. We’ll use land again because we don’t have to worry about depreciation as we hold that asset, but in this case instead of saying that maybe for B it was land that was held for investment or maybe it was land that was used in business. So those types of lands would have different types of character if you know the rules related to character of income.
Let’s look at a similar example. This time we’ll call them C and D. C is transferring in cash with $50,000 to get a 50 percent interest in return. D is going to transfer in land, and let’s say that D is a dealer in real estate. So now this land might be inventory for them. And, again, this would apply with any inventory but I’m using land because it simplifies some things. Let’s again say fair market value is 50, the basis is 30, and they’re getting a 50 percent interest in return.
All right, so same basic example but we just changed the type of property that our second partner is transferring in. So let’s say that following this transfer into the partnership and the formation that that partnership uses the land but now they use it as the location for its operations. And we’ll follow with what we talked about with the first example. Let’s say a couple of years later the partnership decides to sell that land. And they sell it for $50,000. Again, we’ll keep it at fair market value, the same as the fair market value when it was transferred in because that’s going to make it a little bit easier for us to work with at that point.
All right, so let’s see and think about what would happen in this case. So we’d still have that gain of $20,000, right? So we have the $50,000 that the partnership is selling it for. We’re going to subtract the $30,000 that they have as their adjusted basis, and it ends up with a $20,000 gain. We know that because of section 704C, all $20,000 of that is going to be allocated to D. But you can see that this would create another issue and here it’s what type of gain would this be? So let’s think about that a little bit.
The rules here come based on how the partnership used the property. So if we didn’t have any special rules, then that $20,000 gain would depend on how the partnership used it. So, again, given that you all have, it looks like, some really good experience in partnerships and just in tax in general I’m assuming, then you should realize that if the Partnership used it in ___ or business. So we said that it was location for their operations, and they held it for several years, then that’s going to make it a section 1231 asset. That means that this would be a section 1231 gain. What you probably know then, is that when you have section 1231 gains, those at least have the potential to get preferential treatment. So if our partners are individual taxpayers, and we’re going to transfer out this gain to them, and it would be treated as 1231 gain, then instead of being taxed at the 9.6 percent, as gains on inventory might be, it could be taxed at a preferential rate.
So let’s again think about what the implication would be. So if they transferred this out without any special rules, this was allocated out to the partners, D is going to get all $20,000 based on section 704C that we saw before, but if they had sold it themselves it would have been ordinary income because it would have been a sale of inventory, and they probably would have paid their marginal tax rate on that, and let’s say that was 39.6 percent, but now they’ve converted that to $20,000 of section 1231 gain if we didn’t have any special rules. And so that would have the potential for that preferential treatment. It doesn’t guarantee that it’s going to get preferential treatment. You probably know the rules for section 1231 and how we determine whether it’s going to be taxed at a special rate or not, but it at least has the potential for it.
So, again, if we didn’t have special rules there would be really great planning opportunities here for passing property into a partnership and using it as a tool to convert the character of income. But we have a code section that’s going to put some breaks on that or not allow us to do that. So the section that we have is section 724B. That code section – so I’m not sure if you’re familiar with this code section, but section 724B actually deals with just inventory, but other parts of it, so section 724A deals with unrealized receivables, and section 724C deals with capital loss property. So it deals with all these different types of property that have special rules associated with them that if we didn’t have these rules, there’d be some advantage to re-characterizing income gain, loss, or expense that the partner transferred in.
In this case, the specific rule that we have – because if you are familiar with this code section, you know that each one of those items has different rules. For inventory, the rule is that if the property was contributed to the partnership within the last five years, and the partnership then sells it, the gain’s going to be ordinary regardless of how the property was used by the partnership.
So in this case, let’s think about what the actual implications will be then. B’s not going to get – or D’s not going to get this $20,000 of ordinary – or excuse me, of 1231 gain. Instead, it’s going to be recognized as $20,000 of ordinary income. So, this is an example of how it’s going to stop us not just from shifting the amount or character of income, but shifting the character as well.
So in part with our classes we talk a lot about tax planning and you probably know some of the key variables that we look at, and you should realize that shifting income to someone else is a key aspect of tax planning; if we can do it and it makes sense to shift it at a lower income level.
Also shifting character is a huge advantage, and we’re seeing that a little bit with the second example. We follow up in our course looking at how shifting of character may come into other scenarios. So when we’re dealing with a contribution of property we talk about the other sections – subsections of section 724, looking at issues related to receivables and capital loss property. But, again, if you have some familiarity with partnerships, you’ve probably realized that this comes up in other contexts as well. So it’s an underlying theme that we’ll see across a number of the modules that we do in this online course.
If the partnership’s distributing property – and this isn’t property that was contributed to it, but just property that it buys and then later distributes to the partners, that’s going to create some similar shifting of character issues. When a partner sells a partnership interest it has sort of that same type of issue where if we didn’t have some special rules, we would have opportunities for partners to shift character from something that’s paid maybe less advantageous to something that’s more advantageous.
So, again, what we’re going to do in our course is we take a look at what are those rules, how do they impact it, and how do they stop that shifting, and then what are ways we might plan for it? Are there ways that we can provide tax implications that are best possible for taxpayers that work within the rules but also then consider what are ways that it could be structured differently?
So, those couple of examples give you just an idea of one of the topics that we cover in the partnership course and how we address it. At this point I’ll turn it back over to Michelle, and she’ll talk a little bit more about the program.
Michelle Yan: Great, thanks very much, Professor Rupert. So when we’re looking at admission requirements, some of the things that we consider is that students need to have an undergraduate degree from an accredited institution of higher learning. We’re looking for about a 3.25 GPA on a 4.0 scale. Applicants also need to have either an undergraduate or graduate course in taxation with a 3.0 grade or above, and also a minimum of two years of professional tax experience, including one busy season or you need to hold the following credentials like JD CPA, CSP or enrolled agents.
When it comes to the application requirements in terms of what students need to put together in order to apply to the online Master of Science in Taxation program, first of all, we are looking for a current resume or CV. We are looking for two professional recommendations, and so these can come from your current employers, previous employers, colleagues, clients, and of course for individuals who have their own practices, they can surely get them from their clients. So essentially any individual that you feel can more so comment on your tax work experience or your tax work with them.
The third document we’re looking for is an application essay. There is $100 application fee involved as well. Also, we do require all official transcripts. So whether it be an undergraduate degree or graduate work ____ degree conferred by the accrediting institution. We often had questions regarding students who had completed their degrees outside of the US, their bachelor’s degree. So we certainly welcome serious students who have their actual transcripts, but they would need to be evaluated.
Finally, for candidates whose undergraduate instruction was not conducted in English, may need to submit a TOEFL. So if any individuals have any questions regarding that, they can certainly contact me as well.
When it comes to tuition, just a little bit of a breakdown. There is, as I mentioned before in terms of the application, there’s $100 application fee. The cost of the tuition is $1,513 per credit hour. There’s ten courses and then there are a total of 30 credit hours. The total tuition works out to be $45,390. Typically, I would allocate – anything on top of that total tuition sometimes students will ask what about books and course material. They’ll probably allocate another maybe on average $200 per course for the cost in books, again, times ten courses.
Northeastern University does offer a couple of scholarships and the first thing is with Yellow Ribbon program. Now, Northeastern has committed to supporting our veterans and the online program has recently become part of the Yellow Ribbon program. If you fall under this program, it then means that most or all of your tuition will be covered by the government and Northeastern University. For more information regarding this please do visit the website that is listed on that slide.
As part of our commitment to our alums, beginning Fall, this was in 2015 that the D’Amore McKim School of Business will also offer something called the Double Husky Scholarship for all Northeastern alums who have completed a previous degree at one of our colleges. What this does offer is a 25 percent discount on tuition for online and MS tax program. In addition, the $100 application fee will also be waived. And again, for more information regarding this particular scholarship, you can visit our website listed on the slide as well.
And finally, Northeastern does offer something called the Lifetime Learning Membership. It is available to families of currently enrolled full-time students. So if you have a child, a sister or brother, an immediate family member who’s currently enrolled in undergraduate full-time status at Northeastern undergraduate programs, family members are able to take advantage of a 25 percent discount on tuition. And, again, for more information regarding this you can visit the website that is listed below as well.
Angela LaGamba: All right, thank you very much, Michelle, for walking us through the admissions requirements and tuition and scholarship options that are available to students. What I’d like to do now is open the floor up for questions to our audience if you have any questions for either Michelle or the Professor, please feel free to send it in through the Q&A box. We will be addressing those now. So let’s get started with our first question. This question is for you, Professor, and it’s how can students prepare to be successful in the online program?
Timothy Rupert: Okay, great, thanks. I think that’s a great question. And actually knowing this webinar was coming up I had an online chat with my class on Tuesday night and asked them to provide a little bit of advice.
I guess some of the things to think about – one of the things is that our classes are accelerated and concentrated in the sense that they happen over a five week period. And there’s some great things about that. I think one of those is that rather than in our ground program – and I, again, teach the same partnerships and corporation’s courses there. That’s over a 14 or 15 week time period and you’re coming once a week and we go through it that way. This is concentrated so you’re getting through it in a quicker pace of time. Five weeks and you’re done with that topic. But we don’t change the amount of work that we do within those five works versus the 15 weeks.
So it is concentrated, it’s accelerated, and I think if you’re thinking about applying to the program you have to be aware of that. That you have the time available to commit to it. The students that I ask about – they said to be successful in the program it’s really important that you keep track on the material, keep up to date on it, meet the deadlines because with that concentrated time period you’re going to be done in five weeks, but there’s not time to fall behind.
With that said, I would think the students that – I’ll give you examples from the chat that I was on. We understand that everybody’s busy. You’ve got your practice, your professional life, you’ve got family, you’ve got a lot of things pulling on your time. One of the students on the chat Tuesday night just went back to work. She had been on maternity leave. She had two children because she had twin boys that are about five months old now. Had just started back to work as we were starting this class. She’s got a lot going on. But she said she’s been able to balance that all realizing though that it means sometimes that she’s going to be working a lot on the weekends to catch up with things and get the things in on time.
So just make sure that you have the time to commit to it. And to keep progressing with it because that five weeks goes by pretty quickly. So all of the students were saying you have to really have time that you’re going to be able to commit if you are working full-time and you have a family, you’re able to balance it. There’s some flexibility with things.
What we’ve done in terms of the way that I’ll tell you from my courses, we have deliverables every week. Those deliverable come at the end of the week, so it gives you time to fit it in to your schedule during the week. So most of them come due at the end of the night on Sunday. So you can catch up on the weekend if you don’t have time to get through everything throughout the week because it’s a busy time for you. So that’s probably the most important thing, to keep up with things, to commit to the time, and figure out where you’re going to fit it in order to work well with it.
Angela LaGamba: Great, thank you very much, Professor. The next question that we have from one of our audience members is around the degree for admission. So, Michelle, the question is does the three year degree of 90 credits from university qualify for admissions for the online Master of Science and Taxation? Go ahead, Michelle.
Michelle Yan: So if there are individuals that have completed a degree outside of the US, we would normally ask for a credential evaluation. So take that transcript from the university that you did go to, go through an evaluation process to ensure that that degree is equivalent to a four year bachelors in the US. Depending on that degree you can certainly reach out to myself because we do work with a couple of third party evaluation agencies that we usually recommend students can go to get that evaluation completed. So if you’re not sure whether or not the degree itself from the different country is sufficient for admission requirements, I highly recommend you reach out to myself and we can certainly speak with this individually and I can better be able to advise to which agency that we do recommend that you go to. And so we can find out, let’s say, if you were looking to apply to the Northeastern online MS in Tax program to ensure that you do meet the requirements first.
Angela LaGamba: Great, thank you very much, Michelle. The next question we had from our audience was will the slides be available as a PDF file? So to answer that we are recording this session, so you just reach out to Michelle and we can provide a recording to you as well including the slides.
Let’s see, the next question that we have is around tax season. So tax season is a busy time of year. So, Michelle, one of our audience members wanted to know is can working professionals take tax breaks during tax season in the US?
Michelle Yan: Yes. That’s actually a very good question that we do get. Obviously, students coming to the program – what happens during tax season when I’m working 70,80, 90 hours a week during that time? So typically the courses do run – like I mentioned, one course at a time, and Professor Rupert had mentioned that they are five weeks each as well.
Now, we’re fairly flexible. I mean, even though we say that this program – you can complete the program in a minimum span of 16 to 18 months, you have up to a maximum of five years to complete the program. Now what that really means is that during tax season if it is in the case between March and April deadlines or perhaps extension deadlines for September and October, things are very hectic and there’s just no way that tax practitioners are able to take course during that time, you can elect to take breaks during that time. And so throughout the year because the courses are only five weeks, if you’re taking a break between February to April or perhaps January to April, we certainly do accommodate, and then when we have cases where students take courses between May and then all the way to December. Has that been your experience as well, Professor Rupert?
Timothy Rupert: Yeah, I was just going to say that we do have classes that start early in January and it’s a five week period. So a lot of people will be able to sneak one in there before busy season gets really bad for them, if they’re on the traditional busy season. So they’ll take one then, but then a lot of students, again, if they’re on a traditional busy season won’t be taking anything during that mid-February or beginning of February through April time period.
It’s a similar type thing with the extension season when you get to September and October. For some people that’s perfect timing but for other people it’s just as crazy then, and so people will take a little break for a five week period, get through that, and then start back up again. So I think the way it works especially with our required courses, they’re offered multiple times during the year. So usually, again, most of us – most people in practice have a pretty similar type of busy season, but definitely I’ve had students who have had busy seasons that were off cycle from what the majority of tax profession has just because of the types of things that they’re working on. I think which ever you have, you’re able to work around it.
Also, it’s not even just busy seasons. Sometimes people have major events coming up in their life. I’ve had people that were having children and that would impact when they decided to take or I’ve had people that have had children getting married, for example. It was a big event and they know they’re going to need a lot of time and spend a lot of energy on that, and so I think this format that we have gives them flexibility to take some breaks, move out of it, and then jump back in and continue on.
Michelle Yan: Absolutely, and this also goes for – I’m glad you mentioned that, Professor. It also goes for individuals who want to take vacation. And that type of break. After tax season many tax professionals want to take two weeks off and just go away somewhere, which I can completely understand as well. So we do accommodate for those breaks and that’s why this program fits very well and keeps it very flexible as well.
Angela LaGamba: The next question that we have is for you, Michelle. They’re wondering what are the admissions requirements for the programs? I know, Michelle, you’ve gone through that but maybe can you outline what some of the more common elements or common questions that you get during the admissions process?
Michelle Yan: Yeah, sure, absolutely. So the admission requirements, I have them listed on the slides, once again. But essentially, as I mentioned, you typically do need an undergraduate degree. We’re looking for about a 3.25 GPA from an undergraduate level and a minimum of two years of professional tax experience.
Now if your case is something not necessarily exactly those requirements, if you don’t think you’ve met those requirements, definitely come speak with me because sometimes – I mean, we do judge based on what your experiences are coming in with. So if students have perhaps a slightly lower GPA, perhaps they have a graduate degree that they’ve done really well in but so much in terms of the undergraduate level, or they have a stronger tax background or work background coming in, these are certain things we can certainly discuss to see whether or not you would meet those requirements.
But if you are out of – like I said, sort of the standards, the admission requirements that are listed on the slide and you’re wondering whether or not based on your own background and credentials would you qualify? I’d definitely reach out to myself and we can certainly have more of a discussion at more length.
Angela LaGamba: All right. Let’s see. The next question that we have is around 2017 and how the start dates work for that year. Go ahead, Michelle.
Michelle Yan: So typically with this MS in Tax program there are six start dates throughout the year. This is when it is flexible because of busy season and so forth. So the way we split our year up is a trimester. So January through April is what we consider our Spring semester and we have actually two start dates beginning in Spring of 2017. The first start date begins on January 9th, and then the second start date begins
February 13th. So those are our two Spring starts.
Now for individuals who are saying during busy season it’s highly unlikely that I will take courses during this timeframe, we certainly do have starts after April 15th, and I believe the first Summer start that begins in May will begin May 1st. So that’s something that individuals are considering. That well maybe I can consider something like this after tax season. The May time frame may work. Like I said, we do have another two start dates in the summer in May and the June timeframe of 2017.
Angela LaGamba: Okay, thank you very much, Michelle. So for our audience that is all the questions that we have on screen for now, but I just wanted to turn it over to our Professor and to Michelle to see if they had any final thoughts that they wanted to share with our perspective students. Go ahead, Professor.
Timothy Rupert: Again, just I hope that we gave you a good sense of what our courses are like. If you have any questions you can feel free to reach out to me, you can get in touch with me through Northeastern’s website you’ll find my contact information on there or you can contact Michelle and she can get those questions over to me. But I look forward to working with some of you down the road.
Angela LaGamba: Great, thank you very much, Professor and to Michelle for talking to us a little bit about the program and giving us some insight into the courses that are coming up for 2017. This concludes our session and have a great day everyone.
Angela: Welcome to Northeastern University’s Online Master of Science in Taxation Webinar. My name is Angela and I will be your host and moderator for today. Before we begin, I’d like to go through some logistics for this presentation and address some commonly asked questions. All participants are in listen only mode, you can listen to the audio through your computer speakers and if you have any questions feel free to type them into the Q&A Box and hit “submit”. We’ll be addressing the questions at the end of the webinar session. This event is being recorded, so it can be viewed again at a future time.
We’re very excited to have two panelists with us today; we have Timothy Rupert and Michelle Yan. Professor Rupert is Professor Rupert is Professor of Accounting at Northeastern University’s D’Amore McKim School of Business. He completed his PhD in accounting and MS in taxation and Professor Rupert’s research has been published in such journals as the Accounting Review and the Journal of the American Taxation Association. He has received the university’s Excellent in Teaching Award and the D’Amore-McKim School of Business Best Teacher of the Year Award multiple times. We also have Michelle Yan, the Team Enrollment Lead for Northeastern’s Online Master of science and Taxation and her role is to help respective students through the application and admission process.
Alright, so you may be asking “what are we going to be covering in today’s webinar?” We’re going to be discussing a little bit about Northeastern University and Michelle is going to be sharing some details on the Master of Science and Taxation Program and then we have Professor Rupert who’s going to be covering Corporate Redemption. And then Michelle is going to wrap up by talking a little bit more about the admissions requirements and tuition and fees for the taxation program. At the end of the webinar we will be taking questions during our dedicated Q&A session, so we encourage you to send in your questions through that Q&A Box and just hit “submit”. From here, I’m just going to hand it over to Michelle to get us started. Go ahead, Michelle.
Michelle: Great, thanks Angela. So can I get the next slide? Perfect. So our MS and Taxation Program is part of the D’Amore-McKim School of Business. It was established in 1922 and has a strong reputation for scholarly research and teaching excellence. Billing on high academic achievement, wide ranging work and consulting experience, rich diversity and our extensive corporate ties, D’Amore-McKim School of Business faculty members are leaders in their fields and regularly receive worldwide recognition and awards for their contributions to theory and the practice of management. We do have a global network of over 200,000 Northeastern alumni spanning more than 15 countries, such as China, Canada, India, England, Germany and Australia to name a few. Almost 90% of our students pursuing graduate business degrees have work experience. So our programs are very accommodating and flexible.
We are accredited by the AACSB International Accreditation which is one of the highest business accreditations worldwide. Most recently, Northeastern University’s Online Graduate Business Programs was ranked number 18 in the U.S in 2016 by U.S News & World Report. This also does include our online MS and Taxation Program as well. And just to tell you a little bit about more specifics regarding the Online Master of Science and Taxation, it was certainly designed with the working tax professional in mind, so the course work itself is 100% online. There is no residency requirements, the program can be completed in as little as 16-18 months. There are approximately 10 courses and these courses are taken only one course at a time and each course on average is about five weeks in length. Now, in this program we do offer two specialty tracks if you want to have a focus. The first one is Taxation of Entities and then we have also Taxation of Individuals. Now, there are some students who would like to choose courses from both tracks, you know, of your business focuses on both individuals as well as business, you can certainly mix and match between the tracks as well.
There are a variety of tax professionals coming into this program and we certainly have students spanning and coming from, you know, sort of the traditional public accounting firms, we do have individuals coming from private industry, wealth management, individuals coming from the IRS and of course the big [four] firms like the [YKPMG] as well. So it is certainly a fantastic opportunity to collaborate on cases, trade ideas in the program, learn from each other and develop strong networking opportunities. Now, we conducted a survey in September of 2016 of Northeastern University’s Online MS and Taxation Program and this is what some of the graduates had to say and some of the things they mentioned at the top, reasons for attending Northeastern; 1) is our accreditation, because we are again, AACSB accredited and also our online format. We make it a lot more flexible for them that they can access their course work either in their office or at home. Additionally, 77% of all the respondents in terms of when they’re looking at overall student experience mentioned they had a very good to outstanding experience in the Online MS and Taxation Program.
As I mentioned in terms of the types of students who are coming into the program, we do have approximately 22% respondents most of whom do work in consulting of some sort and also 22% work also in taxation and accounting. And finally, some of the stats that we received is that when it comes to salary three of the four respondents also received a salary increase of 10% or more once they’ve graduated from the Online MS and Taxation Program. And now I’d like to pass over to Professor Timothy Rupert to speak to us a little bit more regarding corporate redemptions.
Timothy: Thanks Michelle. So welcome everyone! As Angela mentioned at the start, my name is Tim Rupert and I’m a Professor in the accounting group and teach in the MST Program. And she mentioned that I have a doctorate degree from Pen State University, but I also have an MS and tax degree that I got along with an undergraduate degree in accounting. So I thought I’d tell you a little bit about what it might be like to be in one of our classes and doing that by talking about the way that we cover some of the material. And so I teach the [entity] classes in the online program, so Corporations and Partners and Partnerships. So today I thought I’d give you a little bit of background on something we cover in the Corporations class which is Corporate Redemptions.
Just to give you a sense of where this material falls in the overall scheme of things, I mentioned that there are two entities courses that all students in our program have to take, so one is Corporations and Shareholders and the other is Partners and Partnerships and these are meant to be introductory level courses beyond what you would have in the undergraduate or masters of accounting program. So more detailed, but introductory and type of courses that will allow you to get further into our advanced courses that come up as our elective.
So, I thought I would talk a little bit today about Corporate Redemptions. So, let me just jump right into that. When I think about our online MST Program, what I find is that often times the students come from a wide variety of backgrounds in tax, so there may be some students that work in corporate taxation, others may work on individuals, others may work on flow through entities. So typically, and I’m guess that’s probably the case with all of you today that are listening, so usually I like to start a lesson with a quick overview of some of the basics. I’m guessing that some of you may have worked with corporate redemptions before but I’m also guessing that some of you work with individuals or other entities and haven’t seen anything related to the redemption rules, so I thought a great way to start this might be talking about a basic definition of what is a corporate redemption? And you know, we throw that word around a little bit, or those words around a little bit, but in fact, it’s a pretty straightforward situation. It’s any situation in which a corporation reacquires its own shares from a shareholder. So the basic definition of redemption is really straightforward.
Next, let’s consider a little bit about how a corporation may use a redemption and one of the reasons I think it’s an interesting topic to cover is because it can be used both by public corporations and by private corporations. So I’ve listed some of the reasons here why a public corporation may use a redemption, buying back some of their own shares, they may believe that their stock is undervalued, they may need the shares in order to exercise options and have those shares on hand to do that with or they might do it to guard against unwanted takeover bids. So those are just a couple of the reasons why a public corporation may use a redemption.
Similarly, a private corporation may use a redemption as well and there the differences usually are that the reasons may deal a little bit more with their ownership structure. So maybe they have a shareholder that wants to retire and since it’s a more closely held or Private Corporation, you know, there isn’t a market available necessarily for those shares. So if that shareholder wants to retire, this is a way that it may allow them to retire. It could also be that, you know, it was a small group of shareholders that decided to form this corporation and they were all on the same page in doing that, but at some point, you know, there comes a little bit of a disagreement about either the direction that the corporation should go in or how they should operate and so one of those shareholders may want to get out of that arrangement and a redemption is one of the ways that they potentially can do that.
Another possibility, and this is one that we talk about in the course actually, when we cover this material is maybe there’s a divorce and you might have the spouses both being shareholders in a closely held corporation. Actually, next week my students will be working on a case brief related to a divorce related case where there’s a redemption and how is that going to be treated. So you know, if we have the two spouses [that] have set up this corporation and own it as their marriage and they may no longer wish to be in this business together, so this is another common use. So you can see that even though the basics of redemption are really straightforward in the sense of what it is, it’s just the corporation buying back their own shares. It can be used in a lot of different ways or to achieve a lot of different objectives that we might have, but one of the aspects of redemption that I think makes it a really interesting area for study is the fact that the tax treatment can vary.
So, I want to start to talk a little bit about what are the tax implications of redemption and here, I’ve written it depends because what makes it so interesting is – if you’ve dealt with this area before you may know that in some cases it’ll be treated as a dividend coming from that stock, but in other cases it can be treated as a sale. So the fact that we have these two possibilities for ways that a redemption can be treated means that it’s an area where we might be able to use tax planning techniques to get the treatment that we want. So, let’s delve into that just a little bit further. You might be saying, well, you know, if I think about an individual tax payer, what difference does it matter if it’s a shareholder and it’s going to be treated as a dividend or if it’s going to be treated as a sale.
Well, right now as you probably know, qualified dividends get preferential treatment for tax purposes in terms of the rate that we pay on them, so it could be 0, 15 or 20%. Dividends also get potentially – or that’s the qualified dividends that get that treatment, also, long term capital gains may also get that same treatment, so that they’re taxed at 0, 15 or 20%. So does it make a lot of difference which of these two it is? Well, I would argue that it does. So you know, just the character of income issues can be important, if you’re familiar with differences for dividend treatments between individuals and corporations, you know that how those are treated for – that type of income is treated for those two types of tax payers can vary a lot and so you know, we often times think about shareholders as being individual tax payers, but they don’t have to be. So you know, if we have corporate shareholders that own a part of this corporation, for their redemption, they may very much like it to be treated as a dividend because they’ll be eligible potentially to use the [dividend] received deduction whereas if they treated it as a capital gain or treated it as a sale, they wouldn’t get any preferential treatment because corporations don’t get those preferential rates. So that character of income issue can still be important even though when we think about individual tax payers the rates are the same.
Another aspect of this is that the amount of gain can vary depending on which way this redemption ends up being treated. If it ends up being treated as a dividend, the whole amount will be treated as dividend income and again, it may get preferential rates but still going to be treated as dividend income. If it’s treated as a long term capital gain from the sale of stock, we get to subtract out the basis of the shares that we’re selling back to the corporation. So the amount of gain there will be different. Also, what we do with that gain can be different, not only just in terms of the rate that applies, which we already referred to, but also in the fact that when it’s a long term capital gain they may be able to offset it against other capital losses that they have. So there are possibilities there with this basis offset and offset against other gains and losses that they have that might make this an interesting area for tax payers to plan for, if they can get one treatment versus the other. So the question then is how do we get that differential treatment? How do we determine whether we’re going to treat it as a dividend or whether we’re going to treat it as a sale that might result then in a long term capital gain? So, when we look at this, they’re really – in the tax code there’s a basic principle that’s going to determine the difference between these two and the basic question is has the shareholders ownership interest in the corporation substantially reduced? If it has, then we’re going to treat it as a sale, if it hasn’t, then we’re going to treat it as a dividend.
So one way that I like to think about this or examples that I like to give, so let’s say for example that we have a sole shareholder of a corporation, they own 100% and let’s say that that’s 100 shares, even if they sold 99 of those shares back to the corporation, has anything really changed? Well, now they’ll own one share instead of 100, but if they’re the sole shareholder and they’re selling it back to the corporation, they still own 100% of the corporation. So that’s an example where if we’re selling it back to the corporation, our percentage of ownership hasn’t really declined at all, so that’s a scenario where it would be treated as a dividend. On the flipside of it, let’s say that we have the same shareholder that has 100 shares but now they’re not a sole shareholder, maybe it’s a publically held corporation and they sell 99 of their shares on the open market and it just so happens that the corporation is the one that buys them on the market. Well, you know, that’s pretty much as straightforward as an arm’s length transaction as you can get with that corporation, it just happened to be on the open market and the corporation just happened to be the shareholder that bought it.
So there, their percentage of interest would have dropped substantially if it’s on the open market and it would be treated as a fail. So, we have those sort of two extreme examples, you know, where you still end up owning 100% in the first example or where you end up owning one share and the corporation just happened to be the one that bought the shares back on an open market. So – but there’s a whole bunch of variation in between, right? If we think about that as a spectrum with those two ends of the spectrum, how are you going to figure out what happens when it isn’t quite as clear as those two ends of the spectrum? And that’s where Sec. 302(b) of our Internal Revenue Code comes into play. So, under that Subsection of 302 we have four different ways that you can qualify for sale treatment, so each one of those is a paragraph of that subsection and each has a different way that we can qualify for sale treatment versus qualifying for dividend treatment. So, if you don’t meet one of these four ways then you’re going to be treating this redemption as a dividend.
So today I thought I’d give you a brief overview of those so you can sort of get the idea of the type of thing that we would be covering as we would be looking at this material. So, let’s talk about the first one, Sec. 302(b)(1); this is defined as a redemption that’s not essentially equivalent to a dividend and this is probably the least attractive way out of the four ways that we have under Sec. 302(b) for us to qualify for sale treatment. The reason that it’s the least attractive way is that it’s a really broad overview type of subsection and it really comes down to a facts and circumstances test. So in other words, you know, based on everything that’s here, what does it really look like? Does it look like a dividend or does it look like a sale? So is it essentially equivalent to a dividend or not? Essentially, if this is the way that you’re going to try to qualify, then you know that there’s a high probability that the IRS may question that, that you didn’t fall under one of the more objective tests that we have in the following paragraph so this is your last hope. So this is probably, like I said, the least attractive way because there’s some speculation about what will happen. Will the IRS question it? And if they question it, you may end up having to go to court and if you go to court, will you win? So it’s a possibility and we talk in our class about when is this the way to go and when isn’t it? But less likely to be the one that we want to rely on.
So let’s look at some of the other tests that we have. Sec. 302(b)(2) has a set of rules called the Substantially Disproportionate Redemption and this really fits right in with that basic principle that I provided a few minutes ago that we really want to take a look and see did the ownership of this shareholder drop substantially? So with this test, the Substantially Disproportionate Test – we have a series of tests that we use to figure out has their percentage of voting interest reduced substantially? So basically three tests that we use; there’s a voting stock test, common stock test and an absolute ownership test. And again, with this overview I’m not going to go into the details of it, but when we cover this in the corporations and shareholders class, we look at these tests and see how are they defined? What are the ways that we calculate it and what are the ways that we can plan around this potentially? So we know that if we meet these tests that it’s going to be treated as a sale. If we don’t meet these tests, then it’s going to be treated as a dividend. So – and it’s a [bright line] test, you meet them, it is, don’t meet them, it isn’t treated as a sale. So you could see that there might be ways to plan around some of this then, so if you’re familiar at all with anything in the corporate setting, you know, there are other places where we have voting stock tests and this one isn’t so different, we’re just looking at a percentage of interest before the redemption and a percentage of interest after the redemption and we’re going to see if it drops substantially.
So, again, we might look to see are there ways to plan around that, either to meet this test if we want it to be treated as a sale or to have it not meet this test if we wanted it to be treated as a dividend. As I mentioned here, this is the most objective way to qualify because it’s all mechanical calculations, but again, you might be able to plan around it by structuring some other transactions and redemptions because we not only look at redemptions of the tax payer that we have an interest in, but the complete planning for redemptions that we might have. So this is a great way to qualify for this redemption to be treated as a sale.
Let’s look at the third possibility and the third possibility is called a Complete Termination of Interest and it’s under paragraph 3 of subsection 302(b). So, this one may seem like it’s really straightforward and in the simplest point, it can be. It just means that the shareholder completely terminates their interest in the corporation. So you know, if I gave you the example from before, we have a shareholder that owns 100 shares, if they sold all 100 of those shares, then that would seem like it’s pretty straightforward that it’s a complete termination of their interest, but as you might guess, I know that you are probably a [tax] professional and with your familiarity with our internal revenue code you probably know nothing is as simple as it may seem and that’s the case here. So yes, it may seem fairly straightforward that if I sell all of my shares back to the corporation, that I should not have any interest in that corporation anymore, but what makes this a little bit more interesting from our perspective is that you may not have sold all of your interest in the corporation just because you don’t have any shares anymore.
There’s a set of rules here called the Attribution Rules and if you’ve been working in tax it’s likely that you may have come across these somewhere else but they definitely play a role here. The Attribution Rules especially can be important when we’re dealing with smaller or closely held corporations, so let’s say that we have a family that starts a business and maybe it’s the parents that start that business, but as that business continues to grow and their family continues to grow, maybe they have adult children now and they give some of the ownership to those children. Well, those Attribution Rules will come into play and say that even though you may not directly own shares, you indirectly own the shares that are owned by your children, or shares that are owned by other entities that you control. So again, there are ways that we apply these Attribution Rules in this specific scenario. But you can see, that may make this much more difficult to determine if we’ve completely terminated our interest than it might appear at first glance, because I may sell all of the shares that I directly own, if I’m for example, the parent, so those 100 shares that I owned, I sell them all, but if all the rest of the shares are owned by my children, then under these Attribution Rules, I will still own 100% of the shares of the corporation because I’m considered as owning the shares that my children own.
So you can see this becomes a little bit more interesting than it might appear at first glance, where it would seem as if I just sell all of my shares I don’t have an interest anymore. You could see that you might not physically own any shares yourself, but could still be deemed to have a substantial interest in this corporation. So again, in our class we look at those rules and also think about are there ways to plan around that and how do we specifically have to plan for them?
So let’s talk about the last way that you could end up with a redemption being treated as a sale and it’s the partial liquidation rules. So, one of the interesting things about those rules are that they’re slightly different than the other three rules that we have under 301(b)(1), (2) and (3). When we get to these rules, the Partial Liquidation Rules under (b)(4), the thing that’s different about it, (b)(1), (2) and (3), all of those are done on an individual shareholder level analysis. So, we mentioned that our overarching rule is did your percentage of ownership drop substantially? So, to determine that we look at each shareholder that’s part of that redemption and see what was their ownership before, what was it afterwards? With this fourth way that you can qualify for sale treatment we’re looking at the corporation level instead. And so here we look to see if there’s been a substantial contraction of the business of the corporation, so for example, if they have two lines of businesses, do they entirely get rid of one of those? So that would be a reduction in the scope of the business and that’s really what we’re looking at with this corporate level analysis. So you can see, even though it’s part of Sec. 302(b), even though it comes into that same part, is it going to be treated as a dividend for the shareholders or will it be treated as a sale? The analysis is very different because it’s all done at the corporation level, [and has] the corporation reduced their scope versus b)(1), (2) and (3) where we’re looking at has the shareholder’s ownership level substantially reduced? So that’s the fourth way that we can qualify for sale treatment.
I guess to wrap up this, I wanted to talk a little bit about some of the other business issues that come into play because we don’t want to just think about the tax issues. You know, I’m a tax person and you’ve gotten from my background that there’s a lot of tax, right? I have an undergraduate in accounting, I have a masters in tax, I have a PhD in taxation so I always think about the tax issues, but we also have to think about how tax fits into the overall business setting and so I wanted to point that out with this, one of the things we do when we cover this material in the Corporations and Shareholders course is talk a little bit about, so where would this fit in as a part of tax planning? So if a corporation is going to redeem their own shares, that’s going to have an impact on their working capital, right? Because if they’re buying my shares back then they’re going to have to give me cash for that and so it’s one way that they can get rid of my ownership in the corporation but it’s going to cost them working capital. So we may want to think about that, is the corporation in a position to pay big chunks of their assets out to shareholders to get rid of their interest? They may not be able to, so we may have to think about some alternative tax planning strategies. What would we do instead? So, if the corporation doesn’t have the cash to buy, you know, a [dividend] shareholder out, then how can we get that shareholder out? What are alternatives that we might use? So, this is all part of a unit where we talk about the corporate redemptions of how do we change the ownership structure if we want to and what are alternative tax planning strategies that can do that?
So, that’s just a little bit of an overview of how we might cover this material. To give you a little bit of a flavour of what you might see in some of our classes. So, with that complete, I’ll turn it back over to Michelle and Angela.
Michelle: Great, thank you Professor. So I wanted to speak a little bit regarding the admission requirements for the online MS and Taxation Program. First of all, we do require an undergraduate degree from an accredited institution, we’re also looking for an approximate 3.25 out of 4.0 GPA score. We’re looking for a graduate or undergraduate tax course with a grade of 3.0 out of 4.0 and looking for individuals coming in with a minimum of two years of special tax experience including one busy season or if you hold one of the following credentials as well, such as a JD, a CPA, a CAP or enrolled agent. When it comes to application requirements, those interested in applying to the program, we require the following; we need an up to date current resume, we’re looking for two professional recommendations, so these can come from, you know, if you work for an employer, your employer, your manager or partners of the firm, if you have your own business you can get them from your clients as well that you’ve been, you know, worked with them in regards to tax. We are also looking for an application essay, the application itself is $100 in terms of the application fee and we also do require all transcripts from every single [institution] at graduate level, so [students] whose undergraduate instruction was not conducted in English may also need to submit a TOEFL.
When it comes to tuition scholarships, just to give you a little bit of an idea in terms of the cost, there is an application fee like I mentioned before, $100 and altogether the cost for the program when broken down you’re looking at $1,513 and that’s per credit hour. There are a total of 30 credits and so overall tuition cost you’re looking at close to about $45,390, so close to $46,000. Books and course material is separate, I would probably allocate maybe about $200, maybe $250 per course. Again, that’s times 10 courses as well.
Now, at Northeastern University we do offer a couple of scholarships. One of the scholarships that we do offer is the Yellow Ribbon Program and Northeastern University is committed to supporting our veterans and the online program has recently become part of the Yellow Ribbon Program. So if you do fall under this program it means that most, if not all of your tuition will be covered by the government and your fees for university. However, for more information you can visit the website that’s listed on this slide.
The next scholarship I wanted to mention is something called Double Husky Scholarship. As part of our commitment to our alumni, the D’Amore-McKim School of Business offers something called the Double Husky Scholarship to all Northeastern alumni who have completed a degree at one of our other colleges and what this allows for individuals coming back for their second degree is a 25% discount on tuition and additionally the $100 application fee is waived. And again, for additional information you can visit our website that’s listed on this slide.
And finally, we do also offer something called the Lifetime Learning Membership. It is available to families of currently enrolled fulltime students. So family members are able to take advantage as well of a 25% discount on tuition and for more information regarding the Lifetime Learning Membership, the link is also provided on this slide.
Angela: Great, thank you very much Michelle, for walking us through the admissions and tuition requirements for the Online Taxation Program. We are now going to open up our Q&A session and I encourage our attendees today to continue to send in your questions. So the first question that we have is around the course structure, so Michelle, how would the course [be structured] during the tax season for this program?
Michelle: That’s a great question. I think many of you are probably in the midst of tax season and either you’re already very busy or coming up from being very busy, you know, coming up to the March and April deadlines. So typically the courses like I mentioned, they can be completed as quickly as 16 months but you do have an option of extending it out to a maximum of five years. So the 10 courses in the curriculum are typically taken one course at a time and each course is five weeks. Now, we do offer a break automatically for the online MS and Tax Program between the mid-march/end of April timeframe, so for those students that are involved in [taxing] during this time, you can be rest assured that there are no courses offered during this time. Same goes for, you know, throughout the year, you know, I know there are some tax professionals who work with yearend or corporate extensions in September/October, so depending on your busy schedule, busiest time, we certainly are very flexible and we – you can, once you enter the program, work with your students’ first advisor to see what schedule will work best for you. If you do need breaks during your busy time, we certainly can accommodate and we do work with you to put together a more customized schedule.
Angela: Great, thank you very much Michelle. The next question that we have is for your professor, one of our students wanted to know, from a time management perspective if you have any tips or recommendations that have worked with other students to help them balance their time in school while they’re also working fulltime.
Timothy: Yeah, thanks Angela. So knowing that this webinar was coming up, I asked some of my students this week during our chat, I’m in the middle of teaching the Corporations Course right now, if they had some advice or thoughts related to coming into the program and I think some of those things they were talking about might address that question that you’ve just asked because one of the things to understand about the format of our program and the reason that you only take one course at a time is that the courses are concentrated into a five week session, so for example, a corporations course that I would teach in our ground program, we’d meet once a week and we’d go over 15 weeks or 14 weeks, but in the online program we’re doing it concentrated where it’s meeting in five weeks.
Because of that, one of the things that the students noted when I talked with them about it in my chat this week was the fact that you really have to be prepared to spend some time each week on it and they’re all working professionals, so you know, they know that – they all have a lot on their plate, it’s figuring out how to fit that in and it seems like students will have their own strategies for that. One student was saying, you know, the weekend is the time that I catch up on everything, so especially now during the busy season, I will say that in the class that I have now, some people are in the heart of their busy season, there are other people that, for example, are working in corporate tax for a company and so they’re not as busy right now as some of the people that are in public accounting. So you know, but in any case, I think all of them have said, you know, you really have to figure out where you’re going to set that time aside.
Like I said, for some people it’s, you know, do a little bit every day, catch up on the weekend, other people spend more time during the day. One student said you know, I sort of devote five to seven, you know, they’re in a corporate job right now, their time ends at five but they stick around in their office till about seven, do two hours of work every day and then don’t have as much to do on the weekend. So you know, I think people find different ways to make it work and to balance not only what they have going on at work and also with their classes but also their personal life. We also understand that, I’ll say – just to give you a little sense of the way I structure my courses, there are deliverables every week, but knowing that people have busy lives, just again with personal life, with work and then now adding education on top of it, I’ve structured it so that most of my deliverables are due at the end of the weekend so that, you know, there aren’t too many times when there’s something that’s due during the week. If anything, it’s a discussion board type of assignment where you know, you may be jumping on and interacting with class mates about a tax policy issue on the material that we’re covering. So it’s something that you can do in very short time so that if you don’t have a lot of time during the week, you can catch up with assignments at the end of the week.
Angela: Great, thank you very much Professor. The next question that I have is for you, Michelle. I’m wondering if you could talk a little bit about the current students in the program, what is their professional background and maybe a little bit about the industries that they typically work in.
Michelle: Sure Angela. So the kind of students that are coming into our program, like I mentioned, we do require students coming in to have some – to have tax experience, some form of tax experience. I’m finding that, you know, many of them, like [some] that we’ve mentioned, they do come from [pro] accounting so they’re very busy individuals and we certainly recognize that. There are individuals who have their own tax businesses or tax preparation businesses, individuals coming from private companies, consulting firms, you know, the big four, the IRS, Wealth Management, so there certainly is a variety of individuals coming in and I think the interesting thing with this group of individuals that are coming into the online program who are interacting with each other not only to help with certain goals and motivations you have for pursuing the program in terms of [warming up] in your firm or increasing your knowledge to help, you know, sort of service your clients better, but it’s a good opportunity to interact with individuals coming from all these different areas networking with them, working on cases with them, so it’s a great way to sort of bounce ideas of bounce ideas off each other and then utilize the strategies that you’ve received from each other to be able to implement that in your business. So in terms of demographics, like I said, there’s certainly a wide range of individuals coming in to the program.
Angela: Great, thank you very much Michelle. And Professor, a question for you; can students take courses from the other track as well or do they just need to take courses from the entity track for the program?
Timothy: Yeah, you can take courses across both tracks. We find that based on their practice, students often times might want to concentrate on one track, so we have the entity track that has all the courses that might be related to the different tax entities and then we have more of an individual track and a financial planning track that, you know, might deal with individual issues. A lot of students will stick with one track just because that’s where their practice is focused, but I also know a lot of the students that work across the tracks. So you don’t have to stick to one track and only take courses in that track, if there are courses that interest you, you can jump across the tracks. If you want to think about extending your practice in another area, you know, this is a great way to get some more in depth study in that area. So, you know, actually, one of the neat things is going to graduation and actually meeting some of our students in person then because there’s no requirement that you come to campus at any point, but many of them come for graduation. And I always go over and talk with them before the ceremony and it’s interesting – I only see them for those entity courses at the beginning of the program, so I’ll talk with a lot of them about what did you take at the rest of the program and a lot of them do blend those two tracks, they find courses that interest them across both and there’s no problem with jumping back and forth between those tracks.
Angela: Great, thank you very much Professor. That is all the questions that we have from our audience today, I just wanted to hand it over to our panelists again to see if they had any final thoughts, professor?
Timothy: I don’t think so, I mean, if you do have any questions [to] consider our program more, I invite people to reach out to me. You can find me on the D’Amore-McKim website and I’d be happy to talk with you further.
Angela: Thank you very much, Professor. And Michelle?
Michelle: Yeah, so I wanted to mention, our initiative that Northeastern University Online MS and Tax Program we’ve been running, so a lot of times students have questions regarding the online set up, you know, if they’ve never done an online course before, jumping into an online program can be a little bit intimidating. So what am I expecting? What does the platform look like? And so since last year, Northeastern Online MS and Tax Program, we are conducting something called a [mini mook] or a sampler for one of our courses and what it is is essentially giving perspective students an opportunity to sample the first week of one of our courses free of charge. So students will have an opportunity to walk through the student platform, participate in these discussions that Professor Rupert mentioned, you know, with other tax professionals.
You can go through leadings, work on assignments and you actually have an opportunity to speak with one of our professors live in one of our live sessions and the purpose of this [mini mook] or sampler for the MS and Tax Program enables prospective students to appreciate the quality of the learning experience that we do offer online at the D’Amore-McKim School of Business, you know, we want you to take a look at what the online learning environment is all about and of course to take a look at the calibre of tax professionals that are coming into the program and like I say, giving you an opportunity to navigate and get a feel of what the online learning is all about and like I mentioned before, you have an opportunity to participate in the live chat session so this is a natural face to face interaction with one of our professors in the program, you can utilize a head set and a web cam to speak directly with the faculty as well as perspective students that are also interested in joining this particular [mini mook] course sampler.
So this is an opportunity for students who might be a little bit nervous in terms of jumping to an online program if they’ve never done so before, it’s a great opportunity for you to experience what it would be like for this first week. So for those that are interested in participating in something like this, we are running one beginning March 6th, it will run for one week. It starts on a Monday, ends on a Sunday so from Monday march 6th until Sunday march 12th. So those individuals that are interested, we’ll be sending the information out over email giving you the dates and for those that are interested, you can register with us and then you can certainly participate with our online MST [mini mook] or sampler.
Angela: Great, thank you very much Michelle. That is all the time that we have for today. If you have any additional questions, please contact Michelle, we’ve put her phone number and email and also her [scheduler] right on the slide so you can reach out to her directly. And again, I just wanted to thank Professor and Michelle for taking the time to talk to us about Corporate Redemptions and the Online Taxation Program. This concludes our session. Have a great day everyone!