Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Chapter 18, Problem 18AP
To determine
Determine the amount of penalty that would be imposed on Mr. and Mrs. A under each situation.
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Andrea's 2020 return was audited by the IRS. Andrea failed to report taxable interest income on her return, which resulted in an assessment of $8,000 in tax. Assuming her actions were intentional and fraudulent, what is her accuracy penalty?
John filed his individual income tax return 3½months after it was due. He had not requested an extension of time for filing. Along with his return, John remitted a check for $1,000, which was the balance of the taxes he owed with his return. Disregarding interest, calculate the total penalty that John will be required to pay, assuming the failure to file was not fraudulent (and that he is not subject to failure-to-pay penalties).
Juan inquired from the BIR whether or not he will be covered with the new tax law. The BIR issued an administrative ruling that his activities are not covered by the new tax law. As a result, Juan did not pay his tax for several years based on the said BIR ruling. Currently, the BIR Commissioner found out that the previous ruling was erroneous and reversed the same with a new BIR ruling. The BIR then issued tax assessment against Juan for purposes of collecting back taxes.Is the tax assessment against Juan correct?
A. Yes, because the previous BIR ruling was corrected and the activities of Juan should have been taxable.
B. Yes, because the ruling of the BIR Commissioner must be final.
C. No, Juan should be exempted from paying taxes under the old and new law.
D. No, because reversal of BIR ruling shall not be retroactive in application especially if the ruling is prejudicial to the taxpayer
Chapter 18 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 18 - Prob. 1QPDCh. 18 - Prob. 2QPDCh. 18 - Prob. 3QPDCh. 18 - Prob. 4QPDCh. 18 - Prob. 5QPDCh. 18 - Prob. 6QPDCh. 18 - Prob. 7QPDCh. 18 - Prob. 8QPDCh. 18 - Prob. 9QPDCh. 18 - Prob. 10QPD
Ch. 18 - Prob. 11QPDCh. 18 - Prob. 12QPDCh. 18 - Prob. 13QPDCh. 18 - Prob. 14QPDCh. 18 - Prob. 1APCh. 18 - Prob. 2APCh. 18 - Prob. 3APCh. 18 - Prob. 4APCh. 18 - Prob. 5APCh. 18 - Prob. 6APCh. 18 - Prob. 7APCh. 18 - Prob. 8APCh. 18 - Prob. 9APCh. 18 - Prob. 10APCh. 18 - Prob. 11APCh. 18 - Prob. 12APCh. 18 - A revenue agent determined that Ms. Owen underpaid...Ch. 18 - Prob. 14APCh. 18 - Prob. 15APCh. 18 - Prob. 16APCh. 18 - Prob. 17APCh. 18 - Prob. 18APCh. 18 - Prob. 19APCh. 18 - Prob. 20APCh. 18 - Prob. 22APCh. 18 - Prob. 8IRPCh. 18 - Prob. 9IRPCh. 18 - Prob. 1RPCh. 18 - Prob. 2RPCh. 18 - Prob. 1TPCCh. 18 - Prob. 2TPC
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Similar questions
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- Neville's 2020 return was audited by the IRS and was assessed $18,000 in tax. Assuming his actions were negligent, not fraudulent, what is his accuracy penalty?arrow_forwardMs. Schmidt didn't request an extension of time to file a 2022 income tax return and didn't mail the completed return to the IRS until August 8, 2023. Ms. Schmidt enclosed a check for $2,610, the correct balance of tax due with the return. Required: a. Assuming that Ms. Schmidt can't show reasonable cause for filing a delinquent return, compute the late-filing and late-payment penalty. b. Compute the late-filing and late-payment penalty if the return was not mailed until November 21. Complete this question by entering your answers in the tabs below. Required A Required B Assuming that Ms. Schmidt can't show reasonable cause for filing a delinquent return, compute the late-filing and late- payment penalty. Late-filing and late-payment penalty < Required A Required Barrow_forwardMs. Schmidt didn't request an extension of time to file a 2021 income tax return and didn't mail the completed return to the IRS until August 8, 2022. Ms. Schmidt enclosed a check for $3,490, the correct balance of tax due with the return. Required: a. Assuming that Ms. Schmidt can't show reasonable cause for filing a delinquent return, compute the late-filing and late-payment penalty. b. Compute the late-filing and late-payment penalty if the return was not mailed until November 21. X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Compute the late-filing and late-payment penalty if the return was not mailed until November 21. Note: Round your intermediate and final calculations to the nearest whole dollar amount. Late-filing and late-payment penalty $ 698 x < Required A Required Barrow_forward
- T embezzles $100,000 from his employer in Year 1. The embezzlement isdiscovered during the course of an audit in Year 2, at which time T repays the money infull.a. T realizes $100,000 of income in Year 1.b. T doesn’t realize any income in Year 1 because he had a legal obligation torepay the money at the time he took it.c. T realizes $100,000 of income when the embezzlement is discovered in Year 2,but only if he doesn’t repay it in that year.d. None of the above. While shopping at a flea market in Year 1, T bought a simple jewelry box for $20.When T got home with her new purchase, she discovered that the box had a hiddencompartment which contained an emerald ring. She then immediately had the ringappraised by an expert on emerald jewelry and learned that it was worth $5,000. T soldthe ring to her mother for $4,000 in Year 2.a. There are virtually no cases dealing with the recognition of income for noncashor non-bullion “treasure trove.”b. T would be required to recognize $4,980 of…arrow_forwardMs. Schmidt didn't request an extension of time to file a 2021 income tax return and didn't mail the completed return to the IRS until August 8, 2022. Ms. Schmidt enclosed a check for $1,490, the correct balance of tax due with the return. Required: a. Assuming that Ms. Schmidt can't show reasonable cause for filing a delinquent return, compute the late-filing and late-payment penalty.arrow_forward
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