Recommendation

Jim should advice Ron that he could not prepare a tax saving plan for the two years losses because it
was just a hobby.

However, he should convince Jim to convert his hobby to real business, so that Ron can claim tax
savings for the future years. By this way Jim would not get into the bad side with Ron. He can assist
Jim to make future tax returns. Currently, Ron is having trouble with current CPA firm thus Jim can be
a competent tax agent for Jim the future. When Ron and Mallory get married, they can take care of
Jims well-being as an act of repaying the kindness.

Advantage

Who Impact
Jim -Uphold his responsibility as a tax agent
(Integrity)
-Can get more clients by winning Jims heart
-Can be married to Mallory
Ron -Enable to conduct business in a proper way
-Can avoid being called to court
-Can get competent tax agent to take care of
his accounts in future
-Can get a good son in law
Mallory -Can get married to Ron
-Together with Ron, they can repay Jims
kindness of taking care of Mallory when she
was young like taking care of his wellness
Tax regulator -Can get the correct stream of tax payment
without any loopholes

Disadvantage

Who Impact
Ron -Cannot get tax saving for the previous two
years.