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To complete this case, students will need to access financial statements from the Securities and Exchange Commission’s webpage. The links are provided. Students will also need to review the conceptual framework that is typically covered in Intermediate 1 to respond to question 5.

This case is based on the three financial statement restatements that Weatherford International Ltd. made over an approximately 18-month period. The restatements were due to a fraud committed by manipulating the income tax accrual in the financial statements. The manipulation used was to overstate the amount of income used to calculate the dividend exclusion and then use a relatively high tax rate to calculate the resulting tax benefit. The tax rate used for the fraud was substantially more than Weatherford’s effective tax rate (ETR), which was a prominent part of the company’s strategic growth plan. The tax senior with the external auditors who reviewed the entry made for the dividend exclusion captured the inconsistency with the comment that “This [the entry] deserves a huh?” The case is intended for students in Intermediate 2, where financial statement restatements and their effect on the company’s financial statements are typically covered. During the years covered in this case, Weatherford was also under investigation for violations of the Foreign Corrupt Practices Act (FCPA). Weatherford’s FCPA violations included multiple instances of bribery, the inappropriate use of volume discounts, improper payments and kickbacks in the United Nation’s Oil for Food program. Weatherford received the eighth-largest fine in the history of FCPA violations (at that time) of $152m. Weatherford’s FCPA investigation expanded, and the company paid another $100m in fines for violations of sanctions law and export control law. This case focuses only on the fraudulent manipulation of the financial statements through the tax accrual and does not delve into the other investigations. However, the linkage between those investigations and the fraud in this case is Weatherford’s nonexistent internal controls.

This case was designed to be used in Intermediate 2 financial accounting classes to highlight financial statement restatements and review the conceptual framework and materiality. The students who used the case did not have difficulty with the tax aspect of the case. However, most of the students had taken one tax class previously or concurrently. If students have not had any exposure to tax, the instructor might want to walk students through the tax aspects of the case.

Although the federal gasoline tax played multiple roles in financing surface transportation infrastructure in the United States, experts did not agree on the tax's purpose. Some argued that it was essentially a fee for users of the nation's federally supported highways. Others suggested that it should play a more prominent role in environmental, energy, and transportation policy by correcting for driving-related externalities. Still others suggested that it should be used to reduce the federal budget deficit. Finally, the tax itself had remained at the same level since 1993, and with the Highway Trust Fund virtually insolvent, many experts believed it was time for an increase. The case presents a background on the U.S. federal gasoline tax, an overview of the market for gasoline in the United States, and survey of gasoline taxes in U.S. states as well as several other countries around the world.

The case can be used to discuss the incidence of the gasoline tax, as well as its role as a Pigouvian tax to deal with negative externalities related to gasoline consumption and driving. There is sufficient data in the case to enable students to analyze the incidence of the federal gasoline tax and to determine the socially efficient level of the tax in light of externalities related to gasoline consumption and driving.

Business environment, international business management.

The case is suitable for students of the business environment, and of international business management.

The case revolves around the reaction of the Finance Ministry of India on Vodafone's tax case and its implications on FDI and the foreign investors who are investing in India. The core issue is the political risk(s) faced by Vodafone even after having won the tax case in the Supreme Court, the highest judiciary body in India. The Government of India has amended the law to bring the tax into retrospective mode and it signifies the impact of political decisions on business organizations.

The case can aid in understanding the effects of changes in a political system and legal framework on the efficacy of business entities; and the importance of, and intricacies involved in, the formulation of political risk mitigating strategies while entering into new markets. The key learning outcomes are: understanding various types of political risks faced by multinationals; assessing the political risks involved in foreign investments; and appreciating the possible mitigating strategies to handle such risks.

Teaching notes are available, please consult your librarian for access.

This descriptive case study applies economic concepts to an issue of public policy, and helps build students’ critical thinking, analytical and quantitative skills. The case addresses a variety of topics typically taught in microeconomics and public economics courses. Topics most prominently represented in the case include elasticity of demand and supply, tax policy, tax incidence and negative externalities. Theoretical basis for each topic is laid out in the discussion section of the instructors’ manual, along with insights from student responses. The core nature of the concepts covered in this case study allows it to be integrated with common economics textbooks.

This descriptive case is based on critical economic analysis of secondary sources.

This case study focuses on the imposition of the controversial “soda tax” on sweetened beverages in the City of Philadelphia in 2017 and considers the economic lessons that can be learned from Philadelphia’s experience with the tax. The tax was proposed as a way to raise the city’s revenue while reducing obesity. After the tax was enacted, the sales of sweetened beverages declined in the city, but increased outside the city’s borders. The receipts from the tax have been below projections.

Learning outcomes covered by the case are typical for a microeconomics, public economics or managerial economics course. The appropriate course levels range from the principles to the MBA level of the economics and business curriculum. Discussion questions may be selected to fit a specific course focus and level. The instructors’ manual outlines question sets suitable for various types of economics courses.

Learning objectives are as follows: Analyze the reasons for the implementation of retrospective taxation by the Government of India; infer the dynamics of international tax laws and the settlement process of international taxation disputes; critically analyze the factors that led to the Indian Government’s decision to scrap the retrospective tax; and infer the relationship between a country’s taxation system and its potential to attract foreign direct investment.

This case is an analysis of the Indian Government’s decision to scrap the retrospective taxation amendment. The case discusses the underlying factors that led the incumbent government to take this sudden decision. The case discusses in detail the causes for the introduction of the retrospective taxation amendment and the tax terror unleashed by this draconian law. The case also discusses the embarrassment faced by the Indian Government because of a series of adverse decisions against it and in favor of Cairn Energy and Vodafone in the international courts. It also discusses the adverse effect on Indian banks in case of ailing telecom conglomerate Vodafone Idea Ltd failure.

The case is best suited for postgraduate and executive students studying Taxation subjects in Commerce and Business Management streams.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

The learning outcomes of this study are as follows:

1. understand the role of financial inclusivity in the sustainable development of a nation;

2. examine the concept of social entrepreneurship and identify the skills needed to be a social entrepreneur;

3. analyze the opportunities and challenges faced by social entrepreneurs, especially in an emerging economy; and

4. assess the feasible options with respect to upscaling and expansion.

Yamuna Sastry, a young woman from a traditional Indian family, had set out to achieve her dream of financial inclusivity by helping the underprivileged in her country gain financial independence and credibility. When she was approached by a cab driver to file tax returns for him, a new venture took shape in her mind, and along with a partner, CabDost, a socially driven financial advisory start-up was created to provide financial advisory services exclusively for cab drivers. CabDost had been instrumental in making over 15,000 cab drivers financially literate, instilling in them a culture of compliance, getting them tax refunds and enabling the Indian Government recover eight crores in taxes. The success of financial inclusivity among cab drivers inspired CabDost to extend its financial services to truck drivers, auto drivers, housekeeping staff and other contractual workforce. The company found it challenging to address the demands of the increasing customer base with its available technical resources. The absence of an in-house tech team and the need for an all-in-one tech platform to provide a wide variety of financial services induced CabDost to explore other options. Dvara Money, a neo bank offering financial services, approached CabDost with a merger proposal. Though it was a lucrative offer, the founding members were apprehensive as they knew that most of the mergers failed because of myriad reasons. They were contemplating on their next move as they were in a dilemma about whether to develop a technical team in-house or to go ahead with the merger.

The case can be taught to business management students as a part of the introductory course on entrepreneurship or social entrepreneurship. The case can be used specifically to make the students understand the role of financial inclusivity in the sustainable development of a nation, the concept of social entrepreneurship, the journey of social entrepreneurs in the financial inclusivity space, right from ideation to execution, the challenges faced in the bargain, survival mechanisms adopted and the various options available for further growth and expansion.

Teaching notes are available for educators only.

CSS 3: Entrepreneurship.

This case illustrates the tax implications of a movie produced in a foreign country that resulted in a loss. Teaching opportunities include the application of tax rules to a Schedule C business loss and a resulting net operating loss (NOL) deduction, the consideration of hobby and passive activity losses, the tax treatment of funds received in a divorce settlement, and how an individual might handle a possible IRS examination. Students are asked to prepare a revised Form 1040 for the movie business loss and the individual NOL deduction based on evidence provided in the case. Sufficient information is provided in the case to identify audit “red flags” in a tax return. Using the tale of an actual movie production in a foreign country and its consequent tax implications can provide an attractive alternative to teaching tax accounting rules that are often considered by students as “dry”.

From a pedagogical point, the case may fulfill following objectives: First, to understand Vodafone’s position in the current environment. Does the environment present the elements that are necessary for them to thrive (as analyzed using a PESTEL framework)? Second, to understand the resources needed to build competitive advantage in an emerging market context (as analyzed using the Porter five forces model); and third, to understand the competitive challenges of conducting business in a highly (and sometimes capriciously) regulated industry.

The Indian Telecommunication sector is one of the fastest growing industries in the world. There are nine telecom operators who are pioneering this growth; however, five private companies: Bharti, Idea, Reliance, Aircel and Vodafone make up 78.86 per cent of the market. These five companies have the opportunity to increase their market share by expanding the services provided to rural India; however, the Indian Tax Authorities have caused some hesitation. Aside from being known as heavy handed and unpredictable, the authorities have also demanded that Vodafone pay them billions in taxes. These court cases have challenged the way that other telecom operators look at investing. The arrival of Reliance Jio as a new player in the Indian wireless space with deep pockets has not helped the already fierce competitive landscape. Reliance Jio is forcing all wireless companies including Vodafone to reevaluate their India strategy.

This case could be used in both MBA and executive education programs.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 11: Strategy.

The case describes the first four years of Dhruva, a tax advisory firm set up by Dinesh Kanabar, ex-Deputy CEO of KPMG. Dinesh and other founding partners had worked with the Big-4 firms and were familiar with some of the tensions in the overall ecosystem of Professional Services Firms. Dinesh wanted to build a distinctive professional service firm driven by values of cooperation, high quality work, transparency and stewardship. Very early in its journey, Dhruva's founding team decided that they would use organizational culture as the North Star for guiding decisions related to growth, internal organization design and even admission of new members including Partners. The first four years turned out to be highly successful for the firm. Since inception, it was ranked as Tier-1 firm in the tax advisory space. It was apparent that the firm had succeeded in building a model of alternate organizational paradigm for professional service firms. The next challenge was to test the scalability of this model as the firm embarked on an ambitious growth journey.

32-year-old Heather Wilson was about to become a property investor. After years of painstaking savings, she had finally reached agreement to purchase her first buy-to-let property, a 1 bedroom flat in London's sought-after Kensington and Chelsea neighborhood. She looked forward to a lifetime of building wealth through property investments. Of course, some of the income the property would generate would be owed to Her Majesty's Revenue and Customs (HMRC). But such was the nature of life. Unfortunately, the tax laws had only recently become less favorable for property investors, but Wilson expected to negotiate a lower purchase price as a result and so she felt confident that her investment remained solid.